Jefferies picks air, electronics over land defence; ups Leonardo

Hensoldt AG

10/07/2026 07:41

** Jefferies shifts its preference to air defence or defence electronics over land defence; it upgrades Italy's Leonardo LDOF.MI to "buy" from "hold," reassured by the firm's strategy
** Leonardo replaces Germany's Rheinmetall RHMG.DE as its top pick in the defence sector
** The broker sees the exposure to MBDA, in which Leonardo holds a stake, as a major driver for an upside on the 2029 outlook given the ongoing ramp and accelerated capex plan
** It flags opportunities for exports of the SAMP/T NG air defence system, Eurofighter and the removal of concerns over funding of GCAP, a multinational initiative to develop a sixth-generation stealth fighter, as positives for the investment case
** The broker sees potential for Leonardo to upgrade guidance with H1 results
** Additionally, Jefferies expects Q2 guidance upgrades for Rolls-Royce RR.L, Safran SAF.PA, Hensoldt HAGG.DE and possibly MTU MTXGn.DE 
     

(Reporting by Paolo Laudani in Gdansk)
((Paolo.laudani@thomsonreuters.com))