August 10, 2023
Top 10 Stock Leonardo Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Leonardo – Top 10 Stock in Milano Italia Borsa Index MIB
Leonardo is listed as a top 10 stock on August 10, 2023 in the market index MIB because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 32 (32% performer), Obermatt assesses an overall hold recommendation for Leonardo on August 10, 2023.
Snapshot: Obermatt Ranks
| Country | Italy |
| Industry | Aerospace & Defense |
| Index | MIB, Human Rights |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Leonardo Hold
| 360 METRICS | August 10, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 32 |
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| SENTIMENT | ||||||||
| SENTIMENT | 39 |
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| 360° VIEW | ||||||||
| 360° VIEW | 32 |
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ANALYSIS: With an Obermatt 360° View of 32 (better than 32% compared with alternatives), overall professional sentiment and financial characteristics for the stock Leonardo are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Leonardo. Only the consolidated Value Rank has an attractive rank of 83, which means that the share price of Leonardo is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 83% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 31, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 32, meaning the company has a riskier financing structure than 68% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 61% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 39. ...read more
RECOMMENDATION: With a consolidated 360° View of 32, Leonardo is worse than 68% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 83. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 31), a riskier financing structure than the competition (Safety Rank of 32), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 39) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Leonardo is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Leonardo. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Leonardo only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 39 (better than 39% compared with alternatives), overall professional sentiment and engagement for the stock Leonardo is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Leonardo. Analyst Opinions are at a rank of 82 (better than 82% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in Leonardo. But Market Pulse has a low rank of 28, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 72% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 30, which means that, currently, professional investors hold less stock in this company than in 70% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 39 (less encouraging than 61% compared with investment alternatives), Leonardo has a reputation among professional investors that is below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Leonardo Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 83 (better than 83% compared with alternatives) for 2023, Leonardo shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Leonardo. Price-to-Sales (P/S) is 73, which means that the stock price compared with what market professionals expect for future sales is lower than for 73% of comparable companies, indicating a good value regarding Leonardo's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 74% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 82. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 26% of all competitors have even lower dividend yields than Leonardo (a Dividend Yield Rank of 26). 74% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 83, is a buy recommendation based on Leonardo's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Leonardo Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Leonardo shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Leonardo. Capital Growth has a rank of 62, which means that currently professionals expect the company to grow its invested capital more than 4% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 87 (above 87% of alternative investments). But Sales Growth has only a rank of 34, which means that, currently, professionals expect the company to grow less than 66% of its competitors, and Profit Growth is also low at a rank of 4. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Leonardo, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Leonardo Debt Financing Safety below-average
| SAFETY METRICS | August 10, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 56 |
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| REFINANCING | ||||||||
| REFINANCING | 14 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 47 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 32 |
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ANALYSIS: With an Obermatt Safety Rank of 32 (better than 32% compared with alternatives), the company Leonardo has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Leonardo is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Leonardo and the other two below average. Leverage is at a rank of 56 meaning the company has a below-average debt-to-equity ratio. It has less debt than 56% of its competitors.Refinancing is at a rank of 14, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 86% of its competitors. Liquidity is at a rank of 47, meaning that the company generates less profit to service its debt than 53% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 32 (worse than 68% compared with alternatives), Leonardo has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Leonardo are on the safer side. ...read more
Combined financial peformance: Leonardo Below-Average Financial Performance
| COMBINED PERFORMANCE | August 10, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 47 |
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| COMBINED | ||||||||
| COMBINED | 46 |
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ANALYSIS: With an Obermatt Combined Rank of 46 (worse than 54% compared with investment alternatives), Leonardo (Aerospace & Defense, Italy) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Leonardo are a good value (attractively priced) with a consolidated Value Rank of 83 (better than 83% of alternatives) but show below-average growth (Growth Rank of 31), and are riskily financed (Safety Rank of 32), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 46, is a hold recommendation based on Leonardo's financial characteristics. As the company Leonardo's key financial metrics exhibit good value (Obermatt Value Rank of 83) but low growth (Obermatt Growth Rank of 31) and risky financing practices (Obermatt Safety Rank of 32), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 83% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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