LEONARDO (LDO.MI) Forecast

Leonardo (LDO.MI) presents a mixed technical picture. The stock has declined approximately 18% from the 59.71 peak (Aug 17) to current 48.975, indicating sustained downward pressure over the past month. However, several factors warrant caution before initiating new positions: (1) Price has stabilized in the 48-51 range over the last two weeks, suggesting potential support formation; (2) The elevated PE ratio of 25.1x indicates the market maintains confidence in earnings power despite the decline; (3) Substantial market cap of €28.3B provides liquidity and institutional interest; (4) Recent volume spikes (2.8M shares on Sept 18) accompanied by consolidation rather than capitulation. Negative factors include the persistent downtrend, lack of a clear reversal pattern, and absence of bullish technical confirmation. The current price sits near recent lows with limited margin of safety. Recommendation: HOLD for existing positions; new buyers should await either a break above 51.50 resistance with volume confirmation or a pullback to 47.00 support before establishing positions. Monitor for Q3 earnings announcements and defense sector catalysts given Leonardo's aerospace/defense focus.