Operating Margin - Leonardo SpA (LSE:0ONG)

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Price: 57.25 EUR 5.43%

Market Cap: 11.8B EUR

7.5%

Current

Average

6.2%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

7.5%

Operating Profit

2.1B

Revenue

27.4B

Operating Margin Across Competitors

Country	Company	Market Cap	Operating Margin
IT	Leonardo SpA MIL:LDO	33.9B EUR	8%
US	RTX Corp LSE:0R2N	256.3B USD	10%
US	Raytheon Technologies Corp NYSE:RTX	262.4B USD	10%
NL	Airbus SE PAR:AIR	169.9B EUR	8%
US	Boeing Co NYSE:BA	176.5B USD	-10%
FR	Safran SA PAR:SAF	134.8B EUR	16%
UK	Rolls-Royce Holdings PLC LSE:RR	107.7B GBP	16%
US	Lockheed Martin Corp NYSE:LMT	124.5B USD	8%
DE	Rheinmetall AG XETRA:RHM	85.2B EUR	13%
US	General Dynamics Corp NYSE:GD	98.9B USD	10%
US	Howmet Aerospace Inc NYSE:HWM	85.9B USD	25%

Leonardo SpA
Glance View

Economic Moat

None

Market Cap

11.8B EUR

Industry

Aerospace & Defense

In the arena of global aerospace, defense, and security, Leonardo SpA stands as a nuanced behemoth, weaving technology and innovation into its core operations. Born from the rich Italian legacy of engineering and craftsmanship, Leonardo has evolved significantly from its origins in defense manufacturing to a multi-faceted corporation with interests spanning from helicopters and aircraft to space systems and cyber security. At its heart, the company is a mastermind of complex systems integration, delivering cutting-edge solutions to military forces and civil authorities around the world. With a strategic focus on high technology and emphasis on R&D, Leonardo not only develops but also maintains and enhances sophisticated platforms such as the Eurofighter Typhoon, a multirole fighter aircraft, and works on international collaborations that place it at the forefront of defense capabilities and aerospace advancements. Leonardo’s revenue streams are as diversified as its product offerings, benefiting from a balanced mix of government and commercial contracts. The company capitalizes on its prime contractor status in numerous defense and aerospace projects, deriving substantial income from the sale of military helicopters, aerostructures, and land and naval defense electronics. Additionally, Leonardo taps into the rising demand for cybersecurity and digitalized battlefield spaces, offering integrated solutions that protect critical information and systems against evolving threats. Its significant investments in research and collaborations allow Leonardo to stay ahead of technological trends, ensuring steady growth and leadership in an industry where innovation is both a necessity and a competitive advantage. As it navigates the future, Leonardo remains a testament to the power of diversification built on a foundation of technological excellence and strategic foresight.

View 0ONG Analysis

0ONG Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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US	Berkshire Hathaway Inc NYSE:BRK.A	Financial Services
US	Bank of America Corp NYSE:BAC	Banking
US	Mastercard Inc NYSE:MA	Technology
US	UnitedHealth Group Inc NYSE:UNH	Health Care
US	Exxon Mobil Corp NYSE:XOM	Energy
US	Pfizer Inc NYSE:PFE	Pharmaceuticals
US	Palantir Technologies Inc NYSE:PLTR	Technology
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US	Visa Inc NYSE:V	Technology
CN	Alibaba Group Holding Ltd NYSE:BABA	Retail
US	JPMorgan Chase & Co NYSE:JPM	Banking
US	Coca-Cola Co NYSE:KO	Beverages
US	Walmart Inc NYSE:WMT	Retail
US	Verizon Communications Inc NYSE:VZ	Telecommunication
US	Chevron Corp NYSE:CVX	Energy

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	Mastercard Inc NYSE:MA	US
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	Walmart Inc NYSE:WMT	US
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	Berkshire Hathaway Inc NYSE:BRK.A	751 300 USD 0.85%
	Bank of America Corp NYSE:BAC	56.04 USD 0.72%
	Mastercard Inc NYSE:MA	585 USD 0.88%
	UnitedHealth Group Inc NYSE:UNH	345.49 USD 1.11%
	Exxon Mobil Corp NYSE:XOM	120.2979 USD 1.53%

	Franklin Covey Co NYSE:FC	17.355 USD -2.61%
	Mohawk Industries Inc NYSE:MHK	109 USD 1.99%
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	Skyworks Solutions Inc NASDAQ:SWKS	59.812 USD -0.01%
	Weatherford International PLC NASDAQ:WFRD	86.685 USD 0.38%

	Johnson & Johnson NYSE:JNJ	208.53 USD 0.5%
	Bank of America Corp NYSE:BAC	56.04 USD 0.72%
	Mastercard Inc NYSE:MA	585 USD 0.88%
	Salesforce Inc NYSE:CRM	262.765 USD -1.26%
	Abbvie Inc NYSE:ABBV	227.5792 USD -2.5%
	Home Depot Inc NYSE:HD	352.9 USD 1.1%

Leonardo SpA
LSE:0ONG