Workers assemble a Leonardo AW139 helicopter on the production floor at the Leonardo plant in Varese, Italy, on Thursday, March 20, 2025.
Bloomberg | Bloomberg | Getty Images
Italian defense firm Leonardo said it is “positioned on a path of strong growth” on Thursday, as European defense companies stand to gain business from the war in Iran, as they have been boosted by the war in Ukraine.
Leonardo unveiled plans to double profits by 2030, the day after German peer arms maker Rheinmetall forecast its sales could grow as much as 45% this year, as both companies have record-high order backlogs.
Leonardo CEO Roberto Cingolani told investors that war was “getting faster and more dangerous,” and warned of the rise of hybrid threats that “increase uncertainty and operational complexity.”
Rheinmetall said that it was in a “prime position” to arm the U.S. amid the war in Iran, with CEO Armin Papperger telling investors that “over the next 10 years, there is a huge need” for its products.
Rheinmetall shares fell 8% after the guidance, which was described as “realistic but soft” by a Jefferies analyst, who added investors had high expectations for a share price that has risen 1,700% since the start of 2022.
The war in Iran, which has entered its 13th day, has renewed focus on defense companies, which are seeing increased demand regardless of their specific focus within the sector.
Leonardo is positioning itself as a digital defense player, investing in defense electronics and interconnected platforms such as the “Michelangelo Dome,” which can detect and neutralize air threats similar to Israel’s Iron Dome. Rheinmetall is a leading supplier of land systems like tanks and ammunition.
Sweden’s Saab specializes in fighter jets, while Britain’s Bae Systems, the largest of the European defense firms by sales and market cap, has a broad portfolio of military equipment from nuclear submarines to the Eurofighter Typhoon jet.
Annual revenue for Rheinmetall, Leonardo, Bae Systems, France’s Thales, Germany’s Hensoldt, and Saab rose an average of 57% between 2021 and 2025.
These companies also saw big increases in their order intake, an indication of future sales, over the same period.
Rheinmetall and Saab have seen the most explosive growth of 323% and 284%, respectively, based on unaudited 2025 figures.
On average, order intake grew 135%. Thales’ order intake grew 27% between 2021 and 2025.
Barclays analysts earlier this week upgraded their recommendation on Leonardo to Overweight from Neutral, saying that the U.S.-Iran conflict helps the narrative of a booming defense sector in the short-term, but Leonardo has greater earnings momentum relative to peers.
Its diversified portfolio and low exposure to Ukraine also offer resilience to potential impact from a cease-fire, they added.
