Leonardo Strikes a Defiant Note with Buyback and Dividend Hike

Italian defense group Leonardo counters stock slide with share buyback and 21% dividend hike, backed by 31% Q1 order growth and analyst upgrades.

The Italian defense and aerospace group Leonardo is pushing back against recent market headwinds with a two-pronged capital return plan. After a near-13% slide in its share price over the past month, the stock now trades at around €50.60, below its key 200-day moving average. But rather than hunker down, management has opted to reinforce its commitment to shareholders.

The company kicked off a share buyback programme on Tuesday, 19 May 2026, authorising the purchase of up to 2.0 million of its own ordinary shares over a maximum of 18 months. The buyback, which was greenlit by the annual general meeting earlier this month, is designed to feed employee share schemes. Leonardo already holds roughly 1.2 million treasury shares, equivalent to 0.2% of its issued capital. The market took notice: the stock edged up 1.44% to €50.65 on the day, though it remains almost 11% below its 50-day moving average.

Alongside the buyback, the board confirmed a dividend of €0.63 per share for the 2025 financial year, a marked jump from the €0.52 paid out last year. The payout ratio stands at 27%. The shares will go ex-dividend on 22 June 2026, with payment due two days later.

The ability to loosen the purse strings is underpinned by a stellar start to the year. Leonardo booked orders worth €9 billion in the first quarter, a 31% increase from the prior-year period, pushing the book-to-bill ratio to 2.0. Revenue rose 7% to €4.4 billion, while operating profit reached €411 million. EBITA, a key metric for the group, climbed 33% to €281 million. The order backlog remains well stocked, ensuring production visibility for months ahead.

Signs of confidence are also emerging from across the Atlantic. A director at US subsidiary Leonardo DRS recently purchased around $1 million worth of its own shares, a move often interpreted by analysts as a vote of confidence. DRS also used a trade show in Florida to unveil a new thermal imaging camera tailored for drones and unmanned vehicles, adding to the group’s technology arsenal.

Debt, however, remains a focus. Net debt stood at €3.0 billion at the end of the first quarter, partly reflecting the €1.6 billion cash acquisition of Iveco Defence Vehicles, completed in March 2026. Leonardo is also weighing the future of its 22.8% stake in German defence electronics group Hensoldt, while maintaining its strategic interests in MBDA and the proposed space tie-up with Airbus and Thales, known as Project Bromo.

On the credit side, Moody’s has upgraded Leonardo’s rating and Standard & Poor’s has improved its outlook. Analysts see further upside, with price targets ranging from €56.70 to €82.00. The next major catalyst will be the half-year results due in July. For now, the market is watching whether the strong order intake will translate into firmer profit guidance and more predictable cash generation.