Leonardo, who does not wage war on the Italy-Israel agreement on the stock exchange
The positive effects for Leonardo from the Italy-Israel defense agreement. Analyst comments. And the performance of the stock on the stock market. Facts, numbers and analysis
With the mutual procurement agreement between Italy and Israel signed on Tuesday, the order for 5 Leonardo AW119KX helicopters was announced. Yet, despite the new contract, the title of the defense giant continues to suffer in Piazza Affari.
“The stock remains below 5 euros, a price which he revised last Tuesday and which had not touched since March in the midst of the sell-off of the markets due to the pandemic. To find it at these levels, we need to go back in August 2013 ”, underlined Banca Akros in a report published by Mf / Milano Finanza .
For the investment bank, the contract is worth € 350 million, thus confirming the buy and target judgment of € 8.5.
Yet Leonardo's shares float below € 5 at the moment.
All the details.
WHAT HAPPENS TO LEONARDO-FINMECCANICA ON THE STOCK EXCHANGE
The title of the defense giant has returned from a series of negative sessions with the title slipping below the 5 euro threshold on Wednesday. Leonardo's CEO, Alessandro Profumo, said he was confident about the recovery in the second half of the year and that the pandemic has opened up new markets in which to use the technologies developed in defense and security such as the infrastructure of the health system.
Since the beginning of the year Leonardo has scored -51%, among the worst in the whole Ftse Mib. The new 2020 guidance announced by Leonardo after the results of the second quarter foresee orders at -11 / -4% to 12.5-13.5 billion, revenues -9 / + 2% at 13.2-14 billion, Ebitda -28 / -24% to 900-950 million and net debt to 3.3 billion.
THE JUDGMENT OF BANCA AKROS
This morning Banca Akros confirmed the purchase recommendation with a target price of 8.5 euros: "Almost double the current price, focusing on the exchange agreement signed by the Italian government of Israel which is worth 350 million euros and includes 20 years of maintenance services by Leonardo ".
AND THAT OF EQUITA
Equita is also positive. "However, we believe the effects are conceivable in the medium / long term", highlighted yesterday Equita, which has a 'buy' rating on the stock with a target price of € 9.2, ie approximately 85% above the levels at which the stock closed Tuesday.
THE AGREEMENT BETWEEN ITALY AND ISRAEL
Italy and Israel have therefore concluded a mutual procurement agreement under which Israel will purchase another five Leonardo AW119KX training helicopters and Italy will purchase an unspecified number of Spike launchers and missiles from the Rafael group, along with advanced simulators for a series. of helicopters of the Italian armed forces produced by a company founded in partnership by Leonardo and Elbit System.
The deal was signed by teleconference on Tuesday due to Covid-19 restrictions by the Director General of the Israeli Defense Ministry, Major General (R.) Amir Eshel, and his Italian counterpart, National Director of Armaments, Corps General. army Nicolò Falsaperna.
The agreement is the final step in a broader agreement concluded by the two countries in February 2019 and which involved the purchase by Israel of 12 AW119 training helicopters and two simulators to replace the Bell 206 in service with the flight school. of the Israeli Air Force since the 1970s. The first seven helicopters were ordered last year and the last five on Tuesday.
As Aurelio Giansiracusa wrote on Start "The value of the contract is 350 million dollars and in addition to the supply of the seven helicopters, options are envisaged for new helicopters as well as the twenty-year coverage of logistic and maintenance support by Leonardo in favor of this new helicopter line of the Israeli Air Force ".
On Tuesday, DG of IMoD, Maj. Gen. (Res.) Amir Eshel, and his Italian counterpart, National Armaments Director, Nicolò Falsaperna, signed a reciprocal procurement agreement, which completes the exchange between Israel and Italy that began in February 2019. 1/3 pic.twitter.com/ SFoM3tOnqP
– Ministry of Defense (@Israel_MOD) September 23, 2020
THE AUSTRIAN ORDER FOR LEONARDO HELICOPTERS
In addition to the mutual agreement for the acquisition of equipment between Israel and Italy signed this week, Leonardo also obtained another contract related to helicopters. As also pointed out by Banca Akros in its report.
On 22 September, the Austrian Ministry of Defense announced that it will purchase 18 Leonardo AW169M helicopters. "The contract is in collaboration with Italy and amounts to approximately 300 million euros". The Austrian government has thus opened the way for a "broad cooperation" with Italy in the defense industry, with a contract of important strategic value for Leonardo. The 18 Italian helicopters – as announced by the Austrian ministry – will replace the old fleet of French Alouette III light helicopters in service since 1967.
Austria thus closes the negotiations for the order for the new helicopters: the signing of the contract is now expected within the next six months.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/leonardo-chi-non-fa-la-guerra-in-borsa-allaccordo-italia-israele/ on Thu, 24 Sep 2020 06:30:00 +0000.