Why does Leonardo go down on the stock market?

“Dramatic fall in Leonardo shares on the stock exchange,” is the stock that is conquering the economic press these days. But why did the Italian defense and technology company suffer such a severe blow to the stock market?

Leonardo shares lost as much as 20% of their value, generating a turnover of 3 billion euros, just the day after the presentation of the company’s three-year business plan. The causes of this free fall are different, but let’s look at the main ones together.

The first is the uncertainty about the future, caused by the recent devaluation of orders for the military sector. The company has stated that forecasting orders is not easy, considering the geopolitical tensions of the moment and the different economic choices of governments

Secondly, the company presented its business plan, which should include about 1.1 billion euros in cuts and divestments, with the aim of reducing debt and improving profitability. This has raised concerns about possible cuts in workers and activities, raising concerns among unions and investors

In addition, the company recorded a decrease in profits from the previous year, which stimulated investors’ sales and made it more difficult to establish itself in the market.

Finally, the company is trying to increase its profit margins and demonstrate its ability to grow internationally, through its high-tech products and its international collaborations. Despite this, the global economic situation is still uncertain and therefore Leonardo’s strategy could be influenced by external factors

In summary, although the company has played an important role in the technology and defense sector, its recent stock market crash sends a signal of strong concern to its investors. However, it is important to remember that the value of Leonardo shares is highly volatile and that there are many future uncertainties, in particular regarding the trend of the global market and the political choices
of governments.

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