Leonardo Bets on Orbit-Side Computing and Simulator Capacity as Valuation Debate Deepens
Published on 10/07/2026 at 17:02 | Editorial boerse-global.de
Leonardo is pressing ahead on two industrial fronts at once, pairing an in-orbit data-processing alliance with a fresh manufacturing hub for helicopter flight simulators, even as equity investors keep their distance from the Italian defense and aerospace group.
The Rome-based company said Monday it had struck a cooperation agreement with Unibap Space Solutions to adapt that firm's high-performance iX20 computing platform for Leonardo's own Space Guardian Earth-observation constellation. The core aim is to crunch reconnaissance data directly in orbit, cutting the need to ship bulky raw datasets down to ground stations before any analysis can begin — a capability that is steadily gaining weight for Earth-observation missions.
That space push sits alongside a separate lunar track. Together with Telespazio, Leonardo signed a letter of intent with ispace to scope out cooperation on lunar infrastructure, with the partners examining communications, positioning, navigation and timing as well as transport options. A central element is the possible use of an ispace orbital transfer vehicle to carry Moonlight satellites toward lunar orbit.
New simulator plant lifts industrial capacity
On the ground, Leonardo has opened a new production building at its Sesto Calende site. The facility spans more than 6,000 square meters and can host development and construction of as many as five helicopter flight simulators at a time, consolidating engineering, assembly and testing under one roof. The first systems built there are destined for operators in Italy and Asia.
The two initiatives address distinct parts of the business: the orbital work targets space-based data processing, while the Sesto Calende expansion speaks to helicopter operators' demand for modern training equipment.
Should investors sell immediately? Or is it worth buying Leonardo?
A pipeline anchored in warship orders
What ultimately underpins the equity story is how quickly Leonardo's multi-billion-euro joint programs convert into earnings. A key yardstick remains the contractual lock-in of large naval orders. On September 24, Orizzonte Sistemi Navali — a joint venture split 51% to Fincantieri and 49% to Leonardo — signed a contract with the OCCAR procurement agency worth roughly EUR 3.7 billion for two DDX destroyers for the Italian Navy. The package includes options valued at about EUR 1.3 billion.
Under that arrangement, Leonardo is in line for subcontracts totaling around EUR 1.7 billion, of which some EUR 480 million relates to optional tranches. How efficiently the group turns these long-dated projects into profitable cash flows will shape the headroom for its valuation.
Analysts trim targets as the stock consolidates
Sentiment on the trading floor has been subdued. The shares changed hands at EUR 46.69, giving the group a market capitalization of EUR 27.34 billion. Media reports noted a 2.24% decline the previous day without pointing to any specific negative catalyst, and by Wednesday the stock was little changed, off 0.4%. The paper has slipped 3.3% since the start of the year and currently trades at EUR 47.26.
BofA Securities kept a buy rating on October 1 but trimmed its price target to EUR 71.00 from EUR 79.50. Analyst David Holmes attributed the move to an updated sum-of-the-parts valuation — a sign that the market is scrutinizing the worth of individual divisions more critically. When analysts mark down their sum-of-the-parts models, it points to a more muted outlook for certain business lines.
Execution risk cuts both ways. Complex naval and electronics programs are prone to delays, and the planned DDX subcontracts are declarations of intent and contractual planning inside a joint venture, contingent on smooth coordination with the partner. Should formal awards slip, or the EUR 480 million in optional volumes fail to be fully exercised, the hoped-for earnings boost would fall short. Expanding development sites also requires upfront investment that weighs on profitability until full utilization is reached.
Levels to watch
Two scenarios are taking shape. As long as the stock holds above its 52-week low of EUR 43.53, the broader case for a bottoming-out stays intact, with the confirmed buy rating and a substantial share of national defense programs likely to lend support. A break below the annual low, however, would risk widening the valuation correction — particularly if evidence mounts of delays in the final subcontract signings for the destroyer program. The formal conclusion of those agreements with Orizzonte Sistemi Navali is seen as the next operational catalyst, one that should clarify both the timing and the definitive order volume for Leonardo.
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