Aerospace and defense company Leonardo DRS (NASDAQ: DRS) will be announcing earnings results this Thursday before market hours. Here’s what investors should know.
Leonardo DRS beat analysts’ revenue expectations last quarter, reporting revenues of $846 million, up 5.9% year on year. It was an exceptional 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 9.1% year on year, in line with the 10.1% 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 Q2 results, giving us a hint as to what we can expect. RTX delivered year-on-year revenue growth of 14.5%, beating analysts’ expectations by 7.8%, and Lockheed Martin reported revenues up 10.5%, topping estimates by 3.8%. RTX traded up 9.2% following the results while Lockheed Martin was also up 13.3%.
Read our full analysis of RTX’s results here and Lockheed Martin’s results here.
In the last twelve months or so, the market has shifted its attention from one area of macro importance to the next (AI disintermediation and AI capex spending to geopolitical conflict, rates, and whether the economy is on solid footing or not). While some of the defense contractors stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 3.3% on average over the last month. Leonardo DRS is up 20.1% during the same time and is heading into earnings with an average analyst price target of $52.90 (compared to the current share price of $49.19).
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