Berenberg lifts Avio to 'buy' on solid rocket motor shortage

Avio SpA

26/10/2026 08:21

Adds Avio's shares reaction in paragraph 2
** Berenberg upgrades Italian aerospace company Avio AVIO.MI to "buy" from "hold," as the firm stands to benefit from a structural shortage in solid rocket motors (SRMs)
** Shares in Avio are up 5%, topping Italy's blue-chip index .FTMIB 
** The broker raises its PT by 18% to €39 ($43.77), citing a "missile bottleneck that continues to tighten," as conflicts widen the US and European propellant shortfall 
** The brokerage notes major defence contractors want independent suppliers at scale, expecting firms like Lockheed Martin LMT.N and Raytheon to fill capacity at Avio's new US plant

        ** "Our channel checks indicate that these US customers have an ambition for Avio to represent a substantial share of their supply base," Berenberg adds
** The broker expects the addressable market for SRMs could reach up to $10 billion by 2030, thus raising its estimates for the group's revenues and core profit for 2030 
** Out of six analysts that cover Avio, five rate the stock "strong buy" or "buy" and only ​one analyst maintains a "hold" rating - LSEG data
     
($1 = 0.8911 euros)

 (Reporting by Romolo Tosiani)
 ((Romolo.Tosiani@tr.com))