Leonardo (BIT:LDO) Valuation Check After Red 6 Augmented Reality Training Breakthrough

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Leonardo (BIT:LDO) is in focus after announcing a partnership with Red 6 to integrate the Advanced Tactical Augmented Reality System into its M-346 jet trainer, creating a field-ready augmented reality air combat training solution.

See our latest analysis for Leonardo.

At a share price of €57.84, Leonardo's 1 day share price return of 0.54% and year to date share price return of 12.92% sit against a 1 year total shareholder return of 29.05% and a very large 5 year total shareholder return of roughly 8x. This suggests that recent weakness, after a 9.34% 1 month share price decline, comes on the back of strong longer term gains as the market weighs new projects like the Red 6 partnership against existing expectations.

If this kind of defense technology story interests you, it can be useful to see what else is out there through a curated list of 34 robotics and automation stocks

With the shares up roughly 8x over five years and currently trading at €57.84, the key question now is simple: are you looking at an underappreciated defense leader or a stock where future growth is already priced in?

Most Popular Narrative: 15% Overvalued

According to Chris1, the prevailing narrative values Leonardo at a fair value of €50.31, compared with the current share price of €57.84, which points to a premium being paid in the market and sets up a debate about what is already embedded in expectations.

Leonardo benefits from robust global defence spending, a diversified aerospace portfolio and accelerating service revenues. Efficiency programmes and digitalisation underpin margin improvement, while a strong balance sheet supports capital allocation.

Read the complete narrative.

Curious what supports a higher future profit margin and a richer earnings multiple than many investors might expect today? The narrative leans heavily on compounding revenue, rising profitability and a valuation framework that treats these cash flows more like a quality compounder than a traditional industrial.

Result: Fair Value of €50.31 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this depends on defence budgets holding up and supply chains remaining manageable, since any cuts or persistent bottlenecks could quickly challenge that premium story.

Find out about the key risks to this Leonardo narrative.

Another Angle on Value

While the narrative fair value of €50.31 suggests Leonardo is overvalued at €57.84, its current P/E of 27.3x tells a more forgiving story. That level sits below the European Aerospace & Defense average of 36.9x, below the peer average of 87.3x, and close to the 29.3x fair ratio, which points to more modest valuation risk than the headline premium might imply. So is the real tension here between price and value, or between different ways of measuring it?