Let’s see the most interesting 3 Italian stocks of this period.
The Italian economy is growing only slightly, with growth of less than 1% expected this year in 2024.
The sectors that have gained the most so far have been the banking sector, but now that the ECB and the FED are about to lower the cost of money, the stock market has started to discount the large gains of Italian banks.

For this reason we highlight 3 actions linked to a sector that has unfortunately returned to the fore in recent years: the defense sector.

Since Russia’s invasion of Ukraine onwards, European states have started to arm themselves again; since the fall of the Berlin Wall in 1989, it is in fact the first time that a real war seriously risks returning to Europe.

ALL European states have started to increase investments to renew fleets of planes, ships and tanks for defense, these are investments of tens, hundreds of billions if we put them all together,

Here then are 3 Italian companies linked to defense and owned by the Italian State which holds the majority stake.

1. IVECO GROUP (IVG:MI)

It has been building trucks and other heavy-duty vehicles for decades now.

Iveco Group is a multinational company specializing in the production of commercial and industrial vehicles based in Turin, Italy.
It was born in 2022 following the spin-off (demerger operation) of the CNH Industrial group.
Iveco Group is listed on the Italian Stock Exchange (Milan).

Main brands and business areas

Iveco Group operates through several brands and divisions:

• IVECO: Light, medium and heavy commercial vehicles (trucks, vans).
• IVECO BUS: City, intercity and tourist buses.
• HEULIEZ: Premium class buses.
• IVECO ASTRA: Heavy vehicles for quarries and construction sites.
• MAGIRUS: Firefighting vehicles and equipment.
• IVECO Defense Vehicles: Military vehicles.
• FPT Industrial: Propulsion systems (engines, transmissions, axles).

It is important to consult updated financial data on Iveco Group investor relations sites such as our dedicated page:

Technical Analysis

The world leader in the automotive sector recorded a modest increase of 0.22% at the close of trading, marking a cautious step forward. The trading session started lively for the stock, which opened at 13.85 euros and approached the high levels of the previous session, demonstrating good stability throughout the meeting. The weekly comparison of the stock with the FTSE MIB index highlights Iveco’s relative strength compared to the index, underlining the attractiveness of the stock for buyers.

In terms of technical analysis, Iveco’s short-term status shows a positive expansion in performance, with a first resistance area identified at €14.1 and a potential correction risk up to the target of €13.32. Expectations lean towards an increase in the uptrend line towards the €14.87 resistance area. Meanwhile, institutional investors seem less enthusiastic about Iveco, as evidenced by intraday volumes of 1,437,346 which are lower than the average volume for a month. However, the risk level is considered low, with a daily volatility of 2.009, suggesting a relatively stable direction for the stock.

Last quarter financial data

• (EUR)     Dec 2023        Y/Y
  Turnover 4.88 Billion 10.39%
  Net income -25 Million -128.09%
  Diluted earnings per share -0.09 -127.27%
  Net Profit Margin -0.51% -125.37%
  Operating income 268 million 5.93%
  Net cash flow 1.24 Billion 56.21%
  Liquid assets – –
  Cost of goods sold 4.13 Br 9.11%

2. Fincantieri (FCT.MI)

Fincantieri embodies the centuries-old tradition of building Italian boats and ships. A merger of many large and small companies, it is now state-owned as a strategic company that produces military ships for Italy and other allied states and one of the largest shipbuilding companies in the world. It is precisely thanks to these orders that in this turbulent period for international politics it is becoming a very interesting stock.

Technical Analysis

The world’s main shipbuilding complex recorded a slight decline, closing trading with a loss of 0.45%. The stock started the session at 0.682 Euros, below the peak of the previous session, and continued with a decreasing trend, closing at 0.668 Euros, the lowest value of the day.

Comparatively on a weekly basis, Fincantieri showed a more pronounced trend than the FTSE MIB index, highlighting greater investor interest in the company compared to the general index.

From a technical point of view, Fincantieri presents a short period of upward acceleration with a price target of 0.6863, while maintaining the risk of a temporary correction up to 0.6353, which would not negatively influence the ongoing positive trend. However, daily volumes below the monthly moving average indicate a lack of trading by “strong hands”.

The low intraday volatility of 1.464 suggests a relatively stable trend, making the stock attractive to investors seeking moderate profits with limited risk of losses.

Last quarter financial data

• (EUR) Dec 2023          Y/Y
• Turnover 1.9 Billion -2.37%
• Net income -16.33 M 58.65%
• Diluted earnings per share – –
• Net Profit Margin -0.86% 57.64%
• Operating income 46.97 Million -32.68%
• Net cash flow 211.75 M 394.52%
• Liquid assets – –
• Cost of goods sold 1.56 Billion – 2.03%

3. Leonardo Spa (LDO.MI)

Leonardo (BIT: LDO)  (formerly Finmeccanica) is the largest defense and space company in Italy and one of the most important defense companies in the world. It is owned by Cassa Depositi e Prestiti which firmly holds the relative majority shareholding and in this particular historical period it should go back to working hard, given what is happening.

The rating agencies have assigned Leonardo a credit rating of BBB+ from Standard & Poor’s and A2 from Moody’s. These ratings are considered “good” and indicate that Leonardo has a good ability to repay its debts.

Technical Analysis

The Italian holding company active in the aeronautical sector recorded a slight increase in its market value, with a gain of 0.5%. The stock showed a vigorous start at 22.2 Euros, maintaining this level almost stable throughout the day, before closing at 22.22 Euros, close to the high of the previous session.

This weekly performance proved to be stronger than that of the FTSE MIB index, attracting investor interest mainly towards Leonardo, rather than towards the entire reference index.

From a technical point of view, the Italian contractor in the Defense sector highlights a strengthening phase, with resistance identified at 22.53 Euros and immediate support at 21.59 Euros.

Operational forecasts suggest a continuation of the positive trend, with resistance expected at 23.47 Euros. Although trading volumes are lower than the monthly average, investment risk remains limited given the stock’s low intraday volatility. This scenario is favorable for investors looking for modest gains but with a limited risk of loss.

Last quarter financial data

• (EUR)   Dec 2023            Y/Y
• Turnover 5.02 Billion 4.71%
• Net income 380 Million 43.4%
• Diluted earnings per share 0.66 43.48%
• Net Profit Margin 7.57% 36.89%
• Operating income 611 Million 31.4%
• Net cash flow 1.51 Billion 93.85%
• Liquid assets – –
• Cost of goods sold 4.35 Br 7.94%