Leonardo, what Intesa Sanpaolo and Mediobanca say about Erdogan’s Turkish affairs for the former Finmeccanica
What happens to the Leonardo stock on the stock exchange, and what analysts say, after the indiscretions of the Repubblica about the former Finmeccanica's helicopter order suspended by Turkey.
Leonardo stock weakened on the stock market this morning (-1.78%) but during the day the share rose: at 3 pm it rose 0.28% to 7.09 euros.
Why is Piazza Affari scrutinizing the stock of the former Finmeccanica? Over the weekend, rumors circulated – published by the newspaper Repubblica – about an extension of the timeframe for the order of 10 training helicopters in Turkey, worth 70 million euros.
REPUBLIC NEWS ABOUT LEONARDO'S ORDER SUSPENDED FROM TURKEY
What did the newspaper directed by Maurizio Molinari write? Leonardo's helicopter order for Turkey is essentially suspended. "In Ankara, the words of Mario Draghi, who called President Erdogan" a dictator ", continue to provoke fiery statements by ministers and political leaders – wrote Repubblica – The Turkish government is demanding an official apology and does not seem willing to settle for clarification through diplomatic channels. And since there are no answers from Rome, the Turkish authorities have begun to send threatening signals, marking their willingness to raise the level of confrontation. The first to end up in the crosshairs was Leonardo, the state-controlled technology holding. After two years of negotiations, the signing of the contract for the purchase of ten AW169 training helicopters was expected in these days. An order worth over 70 million euros, which was to be the first trance of an agreement to replace the old Agusta-Bell 206 of the Turkish armed forces school: the total amount for the Italian company could exceed 150 million. After Draghi's words, the Turks made it known that "at the moment" the operation is suspended ".
GERMANO DOTTORI'S TWEET ON TURKEY AND ITALY
Among foreign analysts, the move did not arouse too many surprises. The tweet of Professor Germano Dottori, member of the scientific committee of Limes, is significant:
It has already happened in the days of D'Alema and Ocalan. Yesterday I anticipated a development of this type in El Pais. Turkey puts geopolitics before the economy. Something that seems aberrant in Italy and instead is the distinctive trait of the conduct of the powers
– Germano Dottori (@GermanoDottori) April 11, 2021
THE VALUE OF THE DICTATOR USEFUL FOR ITALY ACCORDING TO ANTS OF MASS
A newspaper specialized in defense and international relations, such as Formiche by Paola Messa (Leonardo's top manager) underlined “the reasons why Turkey is“ needed ”. Why is Erdogan a leader full of controversies and negativity, but for the EU (Italy) and the USA (and NATO) is it important? The " useful dictator " contains Russia through the "United States of the Turkish world" and can act as an obstacle to the Chinese Silk Road ".
THE NUMBERS BETWEEN ITALY AND TURKEY
What numbers are there between Italy and Turkey? The commercial exchange which, before Covid, was close to 18 billion euros in value, according to the ICE's calculations on an Istat basis, and which even in 2020, despite the slowdown caused by the pandemic, still had a value of over 15 billion . The relations with Turkey are so valid for the Italian industry, Il Sole 24 Ore stressed .
ICE ESTIMATES ON ITALY-TURKEY
Turkey is in fact the 12th country in the world ranking of trade with Italy and is among the ten countries in which – again according to Ice estimates – the greatest growth in exports is expected in the next two years.
ITALY-TURKEY ECONOMIC RELATIONS ACCORDING TO IL SOLE 24 ORE DI CONFINDUSTRIA
The sectors most affected by commercial exchanges with Turkey – the Confindustria newspaper remarked – are that of machinery and equipment (over 1.7 billion euros in exports in 2020), which also in the year of Covid saw growth exports by 11.2% and boasts an active trade balance of 1.2 billion euros, followed by motor vehicles (over a billion exports in 2020, up 5.3%, but with a negative balance of 970 million) , and the chemical industry (918 million in 2020 and a balance of 540 million).
THE COMMENT OF PROMOS ITALIA
Italy is Turkey's fifth trading partner worldwide and second among European countries behind Germany – commented Giovanni Da Pozzo, president of Promos Italia -. The Turkish market is therefore an important outlet for the international business of our companies, particularly in some sectors. Over 1,500 Italian companies are active in the Turkish market, a substantial presence. At the same time, there is a steady growth of Turkish investments in our country. In fact, Italy increasingly represents for Turkey the gateway to the single European market which has about 500 million consumers ”.
THE INTESA SANPAOLO REPORT ON LEONARDO
"While considering the problem as temporary and although we expect a positive solution between the two countries, the news could be negative for the sentiment on the stock in the short term", commented Intesa Sanpaolo this morning (rating buy and target price at 9.1 euro), highlighting that, on the basis of his estimates, the contract for the supply of the AW169 training helicopters represents approximately 1.1% of Leonardo's total order intake scheduled for this year.
WHAT MEDIOBANCA SAYS
Mediobanca Securities is more confident (rating neutral and target price at € 7.50) that it is unlikely that this diplomatic incident will lead to the cancellation of the order by Turkey. Moreover, added the investment bank, “this is a relatively small contract for Leonardo: it represents 0.5% of the group's order intake target for 2021”, equal to approximately 14 billion euros. Equita Sim echoed him (buy and target price at € 8.8): "it is unlikely that the order will be canceled" and in any case "it would represent 0.2% of the order portfolio and if it were entirely included in the this year it would be 0.5% of turnover and less than 1% of EBIT ".
NEWS FROM THE UNITED STATES
Good news, underlines Mf / Milano Finanza , on the other side of the ocean given that no drastic cuts to the American defense are planned for 2022. Last Friday, in fact, the US administration made a request for 753 billion dollars in funding for national security in 2022, up 1.6%, a figure that includes $ 715 billion for the Department of Defense. The request implies a slight decrease for the Pentagon when adjusted for inflation and is "more timid" than the Trump administration's expected request of $ 722 billion for 2022.
THE COMMENT OF AKROS
“The US market is considered strategic by Leonardo as it generates 28/30% of the group's turnover. At the same time, the company expects the revenues and margin of its US subsidiary, Drs, to grow even in a scenario that implies a flat US budget. The news is positive as it resolves fears of major cuts to the US defense budget ”, concluded Banca Akros.
ALL THE HYPOCRISIES OF EUROPE ON TURKEY. THE ITALIAN ITALIAN GAGLIANO ON START
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/leonardo-tutte-le-cose-turche-di-erdogan-con-gli-elicotteri-dellex-finmeccanica/ on Mon, 12 Apr 2021 08:03:03 +0000.