The focus is on the defense sector - but the price/earnings ratios (P/E ratios) of German companies such as Rheinmetall and Hensoldt appear to be significantly overvalued in some cases. This raises the question: Is an alternative from Italy worthwhile?
Leonardo S.p.A. stands out: a broad-based group in the aerospace, defense and security sector, which is partly state-owned (approx. 30%). Its P/E ratio is around 13.9 for 2024, 26.7 for 2025e and around 23.2 for 2026e. This makes Leonardo more moderately valued on paper than many of its German competitors.
Leonardo also has a strategically important cooperation with Rheinmetall: together they have set up the 50:50 joint venture Leonardo Rheinmetall Military Vehicles (LRMV) to develop and manufacture new main battle tanks (based on the Panther KF51) and infantry fighting vehicles (Lynx). The order volume is in the region of €20 billion over 15 years, including around 132 main battle tanks and over 1,000 armored vehicles in various variants.
Le Monde even mentions an order worth €23 billion, including 1,000 Lynx series, and the cooperation is described as a quick and agile response to the delayed Franco-German KNDS project.
Why Leonardo is an option worth considering:
- Relatively moderate P/E ratio compared to many German defense stocks
- Strong entrepreneurial action with international perspective
- Huge strategic project over many years - stable client
- Part of a European consolidation trend with clear growth potential
Of course there are risks - e.g. political framework conditions, dependence on government contracts or macro trends - but Leonardo combines fundamentals with strategic relevance.
