Jefferies starts Italy's Avio at 'buy' on expansion to US market

Avio SpA

07/01/2026 07:34

** Jefferies initiates coverage of Italian aerospace company Avio AVI.MI at "buy" with PT of 39.5 euros on its expansion to US missile propulsion market

** The brokerage says Avio is "rapidly diversifying to tackle the US solid rocket motor (SRM) supply shortage", expanding from its European base with recent investments for an SRM facility in Virginia and partnerships with Lockheed Martin LMT.N and RTX RTX.N

** Valuing the US missile propulsion market as 10x bigger the European's, Jefferies sees this expansion boosting Avio's share of the combined European and US market to 10% by 2029 from the current 2%

** It adds that recent successful Vega C and Ariane 6 launches, and increased European Space Agency's 2026-2028 funding, signal recovery from margins decline since 2018

** Still, the broker sees limited near-term earnings momentum given the current high investment, estimating EBITDA at 34-35 million euros ($39.76-40.93 million) over 2025-27, but also notes a strong backlog rise driving longer-term growth and supporting valuation

    ** Out of five analysts that cover Avio, all rate the stock "strong buy" or "buy" - LSEG data

($1 = 0.8551 euros)

(Reporting by Mirko Miorelli)

((Mirko.Miorelli@thomsonreuters.com))