Aerospace and defense company Leonardo DRS (NASDAQ: DRS) will be reporting earnings this Thursday morning. Here’s what you need to know.
Leonardo DRS beat analysts’ revenue expectations last quarter, reporting revenues of $913 million, up 10.1% year on year. It was a very strong quarter for the company, with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Is Leonardo DRS a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Leonardo DRS’s revenue to grow 6.7% year on year, slowing from the 18.2% increase it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Leonardo DRS has a history of exceeding Wall Street’s expectations.
Looking at Leonardo DRS’s peers in the defense contractors segment, some have already reported their Q3 results, giving us a hint as to what we can expect. RTX delivered year-on-year revenue growth of 11.1%, beating analysts’ expectations by 3.3%, and CACI reported revenues up 8.2%, falling short of estimates by 1.4%. RTX’s stock price was unchanged after the resultsand CACI’s price followed a similar reaction.
Read our full analysis of RTX’s results here and CACI’s results here.
In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the defense contractors stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 2.7% on average over the last month. Leonardo DRS is down 5.1% during the same time and is heading into earnings with an average analyst price target of $52.50 (compared to the current share price of $34.80).
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