Leonardo’s Order Backlog Hits €56.8bn But Shares Stay Stuck Near €50 as Analysts Flag 34% Upside

Leonardo posts 31% order surge and €4.6B GCAP deal, yet stock slides 22% from high. Analysts see 34% upside with Jefferies upgrade to Buy.

For a company sitting on a record €56.8 billion order book and posting a 31% jump in first-quarter orders, Leonardo’s share price tells a curiously different story. The Italian defence and technology group has seen its stock slide more than 22% from the March high of €65.50, closing at €50.86 — a level that leaves it trading below both its 50-day and 200-day moving averages. The disconnect between operational momentum and market sentiment is widening by the week.

The latest catalyst came from the Global Combat Air Programme (GCAP), where Leonardo’s joint venture Edgewing — in which it holds a 33.3% stake alongside BAE Systems and Japan’s JAIEC — landed a contract worth £4.6 billion from the GCAP agency. The deal covers development of the next-generation fighter jet and is the centrepiece of a broader push by European and NATO allies to ramp up defence spending, epitomised by the EU’s Readiness 2030 programme.

Behind the headline order numbers, Leonardo’s first-quarter performance was robust across the board. Revenue rose 7% to €4.5 billion (10% on a currency-adjusted basis), while adjusted EBITA surged 33% to €281 million, pushing the margin up 120 basis points to 6.3%. The order intake itself exceeded €9 billion. The solid results prompted Jefferies to upgrade the stock to “Buy” on July 10 and name it a top pick in the European defence and aerospace sector, setting a price target of €68 — roughly 34% above the current level. Seeking Alpha reaffirmed its buy recommendation on July 14, pointing to the structural tailwind from higher defence budgets.

Analysts are also factoring in the planned integration of Iveco Defence Vehicles (IDV), which is expected to bolster Leonardo’s presence in the European land-systems market and enhance earnings. Kepler Cheuvreux and Equita both issued buy recommendations on other Italian industrial and financial stocks in the same July 14 roundup, underscoring a broadly constructive view on the sector.

Outside Europe, Leonardo DRS is adding to the growth narrative. Chief Executive John Baylouny described demand from international customers as “almost insatiable” in a recent interview, highlighting the subsidiary’s push into artificial intelligence at the network edge via its SAGEcore platform. Leonardo DRS has increased its internal R&D budget to 3.5% of revenue and is targeting growth in space, sensors, missile seeker heads and propulsion technology, while pursuing bolt-on acquisitions to fill technological gaps.

On the innovation front, Leonardo launched two open-innovation calls on July 14: “Discovering Future Technologies”, focusing on AI, high-performance computing, sensors and advanced materials, and “Photonic Technologies” for optical processing and smart coatings. Applications are open from July 6 to September 15, 2026.

Despite the flurry of positive news, the share price has struggled to gain traction. Over the past week Leonardo has fallen 5.64%, while the 30-day decline stands at 2.98%. Year-to-date the stock is down 0.66%, though it still shows a 5.43% gain over twelve months. The relative strength index sits at 48.4, indicating a neutral market — neither overbought nor oversold — while annualised 30-day volatility of 41.18% points to continued turbulence.

With the 52-week low of €43.53 still providing a 16.8% cushion and a market capitalisation of €29.77 billion, the valuation gap has not gone unnoticed. Leonardo is scheduled to report first-half results on July 30, and the market will be watching closely to see whether the Edgewing contract, the Q1 momentum and the broader tailwinds finally begin to translate into share price appreciation — or whether the disconnect has further to run.