Leonardo DRS (NASDAQ:DRS) Shares Gap Up on Earnings Beat

Key Points

• Leonardo DRS shares jumped after an earnings beat, opening at $37.78 versus a prior close of $35.50. Quarterly EPS was $0.46, exceeding the $0.35 consensus, while revenue reached $1.07 billion, up 11% year over year and ahead of estimates.
• Analyst sentiment remains positive overall, with the stock carrying a “Moderate Buy” consensus rating and an average price target of $51.57, though some firms maintain neutral or hold ratings.
• Insiders sold shares through pre-arranged trading plans, while institutional investors own 18.76% of the company. Leonardo DRS develops defense technologies for U.S., allied and government customers across land, sea, air and space applications.

Leonardo DRS, Inc. (NASDAQ:DRS - Get Free Report)'s stock price gapped up prior to trading on Thursday after the company announced better than expected quarterly earnings. The stock had previously closed at $35.50, but opened at $37.78. Leonardo DRS shares last traded at $38.5310, with a volume of 166,937 shares trading hands.

The company reported $0.46 EPS for the quarter, topping the consensus estimate of $0.35 by $0.11. Leonardo DRS had a return on equity of 12.97% and a net margin of 8.52%. The company had revenue of $1.07 billion during the quarter, compared to analyst estimates of $1.03 billion. During the same quarter in the previous year, the company posted $0.29 earnings per share. Leonardo DRS's revenue was up 11.0% compared to the same quarter last year.

Analyst Upgrades and Downgrades

A number of brokerages have issued reports on DRS. Oppenheimer initiated coverage on shares of Leonardo DRS in a research note on Thursday, October 22nd. They set an "outperform" rating and a $45.00 price target on the stock. Guggenheim started coverage on Leonardo DRS in a research report on Monday, September 14th. They set a "buy" rating and a $51.00 target price on the stock. Morgan Stanley lowered their price objective on Leonardo DRS from $47.00 to $44.00 and set an "equal weight" rating on the stock in a report on Friday, October 16th. JPMorgan Chase & Co. boosted their price objective on Leonardo DRS from $48.00 to $53.00 and gave the stock a "neutral" rating in a research note on Friday, July 31st. Finally, Weiss Ratings lowered shares of Leonardo DRS from a "buy (b-)" rating to a "hold (c+)" rating in a report on Thursday, October 22nd. Two analysts have rated the stock with a Strong Buy rating, three have assigned a Buy rating and four have issued a Hold rating to the company. According to MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $51.57.

Insider Buying and Selling at Leonardo DRS

In related news, EVP Jason Rinsky sold 3,864 shares of the business's stock in a transaction dated Tuesday, August 4th. The shares were sold at an average price of $45.81, for a total transaction of $177,009.84. Following the sale, the executive vice president owned 23,581 shares of the company's stock, valued at approximately $1,080,245.61. The trade was a 14.08% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Michael Dippold sold 20,317 shares of the business's stock in a transaction on Wednesday, September 2nd. The stock was sold at an average price of $37.18, for a total value of $755,386.06. Following the completion of the transaction, the chief financial officer directly owned 35,143 shares of the company's stock, valued at approximately $1,306,616.74. This trade represents a 36.63% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 0.25% of the company's stock.

Institutional Investors Weigh In On Leonardo DRS

A number of large investors have recently modified their holdings of DRS. Global Retirement Partners LLC bought a new position in shares of Leonardo DRS in the second quarter valued at approximately $31,000. Edmond DE Rothschild Holding S.A. acquired a new position in Leonardo DRS during the 2nd quarter valued at $32,000. Fifth Third Bancorp bought a new stake in Leonardo DRS in the 1st quarter valued at $41,000. CX Institutional grew its position in Leonardo DRS by 1,617.9% in the 3rd quarter. CX Institutional now owns 962 shares of the company's stock worth $35,000 after purchasing an additional 906 shares during the last quarter. Finally, Root Financial Partners LLC increased its holdings in shares of Leonardo DRS by 426.0% during the 1st quarter. Root Financial Partners LLC now owns 1,194 shares of the company's stock worth $53,000 after purchasing an additional 967 shares during the period. Institutional investors and hedge funds own 18.76% of the company's stock.

Leonardo DRS Price Performance

The firm has a market cap of $10.40 billion, a price-to-earnings ratio of 32.65, a price-to-earnings-growth ratio of 2.08 and a beta of 0.32. The stock's 50-day moving average price is $36.83 and its 200 day moving average price is $42.20. The company has a quick ratio of 1.56, a current ratio of 1.92 and a debt-to-equity ratio of 0.05.

About Leonardo DRS

Leonardo DRS, Inc is a defense technology company that develops and supplies advanced products and systems for the U.S. military and government customers, as well as allied nations. The company operates as a subsidiary of Leonardo S.p.A. and focuses on technologies used in land, sea, air and space-related defense applications.

Its offerings include sensing and surveillance systems, electro-optical and infrared technologies, radar and electronic warfare products, network computing and communications systems, counter-uncrewed aircraft systems, force protection equipment, and naval power and propulsion systems.

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