The Leonardo (D)assaultIt is not a secret that Europe’s defence landscape has shifted dramatically to a pace unseen since the Cold War. In 2022, Central and Western Europe’s combined military outlays reached $345 billion, surpassing 1989 levels as the Cold War ended1. Where there is a commonly cited “peace dividend”, this is the era reaping the rearmament rewards. Even traditionally pacifist countries are upping their defence outlays, while frontline states like Poland and the Baltic nations are planning well above 2% of GDP (the NATO defence spending target) to bolster their militaries.
Of note, European officials, including the European Central Bank (ECB) (monetary) policymaker Olli Rehn, have explicitly called for joint EU programs to fund air defence and drone production to support Ukraine and strengthen Europe’s own defence, even if it means loosening fiscal rules2. When the monetary policy folks start weighing in on defence spending, it is best not to ignore it.
Dassault Aviation and Leonardo SpA, are integral to Europe’s defence-industrial base and they will be pivotal beneficiaries of the continent’s rearmament. Crucially, unmanned aerial vehicles (UAVs)—from surveillance drones to combat-capable systems—are an area where both firms are actively developing capabilities, aligning with Europe’s defence priorities.
Dassault Aviation, long synonymous with fighter jets, spearheaded Europe’s stealth unmanned combat air vehicle (UCAV) demonstrator nEUROn. Launched in the 2000s as a multinational project, nEUROn was led by Dassault Aviation with contributions from several European partners including Leonardo SpA (then Alenia)3. nEUROn combines many of the critical components of modern warfare systems including autonomous flight controls and low-observable (stealth) design. The project is also demonstrative of pan-European collaboration in UAVs. Not to be outdone, Leonardo SpA has developed its own family of medium drones (such as the Falco UAV series). Not to mention, its collaborations with companies like BAE Systems in the Eurofighter Typhoon and next-gen Tempest/GCAP fighter programs.
In essence, Dassault Aviation and Leonardo SpA are key enablers of Europe’s push for strategic autonomy in defence and are poised to benefit from the pivot to UAVs—a shift that began slowly at the beginning of the 21st Century and accelerated meaningfully with the experience gained from the conflict in Ukraine. European militaries have been paying attention; drones have proven their value for reconnaissance, target acquisition, and even precision strikes, fundamentally changing battlefield dynamics. It is a UAV world; legacy tech is just living in it.
While Dassault Aviation and Leonardo SpA aren’t major producers of small drones, it is not as though the two are going to be left behind. Leonardo SpA is developing anti-drone defences and electronic jamming systems. This makes sense. Increased drone usage increases demand for counter-UAV technologies, an area where Leonardo SpA’s electronics division is poised to benefit from radar and laser-based drone neutralisation4.
Alliances are the way forward
The surge in European defence spending is expanding the pie for industry, but it’s also intensifying both competition and collaboration among defence contractors. Interestingly, in the realm of UAVs, collaboration is often seen as the fastest way to close capability gaps. Both Dassault Aviation and Leonardo SpA have shown a willingness to team up with traditional competitors or even non-European firms when strategic.
To this point, Leonardo SpA embarked on a joint venture with Turkey’s Baykar Technologies to produce UAVs in Italy to exploit Baykar’s Ukraine combat-proven designs with Leonardo’s sensors and electronics. In a rapid turnaround, the venture plans to deliver its first product (based on Baykar’s Akıncı heavy drone) within 18 months5. And this is unlikely to be a one-off. Leonardo SpA’s CEO recently emphasised “alliances would be the way forward” to boost defence production without excessive new infrastructure6. The underlying theme is straightforward – making more stuff quickly is the goal.
Dassault Aviation and Leonardo SpA find themselves at the nexus of this transformation—bolstered by macroeconomic trends and political resolve and delivering the technologies that will define European security in the coming decades. The unfolding emphasis on UAVs is a microcosm of the broader story: drones have moved from peripheral acquisitions to must-have capabilities. UAV development, in particular, stands out as both a growth avenue and a strategic imperative. Dassault Aviation and Leonardo SpA are leveraging their deep expertise and forging new partnerships to ensure Europe’s militaries have the drones they require.
Conclusion
The narrative? Reallocation and rearmament. The timeline might be best described as “defence for the long run”. The beneficiaries are those positioned to meet Europe’s capability gaps. Dassault Aviation carries the mantle of Europe’s aerospace prowess and is now backed by a strong wind of political will and funding.
Sources:
1World military expenditure reaches new record high as European spending surges | SIPRI
2ECB's Rehn calls for joint European investment in air defence, drones | Reuters
3Dassault nEUROn to fly again, driving France’s new combat drone development - AeroTime
4Leonardo projects €30 billion in revenue by 2029 | Shephard
5Italy's Leonardo, Turkey's Baykar to set up drone joint venture | Reuters
6Leonardo CEO denies talks with automakers on military production | Reuters
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UAVS
I like this UAVS set upI like the profits and the earnings, and to be honest I don’t want the stock price to go up because I want cheaper shares. I have some buys set up around .47 and looking to double down below .30
This set up looks like it could pop…
- Major MA’s are crossing.
- looking to break out of the descending triangle with strong weekly candles.
- could easily hit .67, 1.37, 1.87 and possibly crest into the 2$ range.
This scenario may be followed by a sharp retest of 52W lows before attempting to climb into 5y highs
Not financial advice
UAVS ReversalNot a financial advisor
UAVS looks to create a momentum spark here with a 3 white soldiers reversal here.
With a very beaten down performance over the last year, this presents a favorable entry for people shopping in the market.
A reversal will clearly show a signal of strength and give investors a signal to buy, RSI curling up. MACD bullish territory. TSI about to cross bullish.
I believe we will witness an impulse wave up. Will need to come back down and stabilize after a nice little run up. To be in under $1.30 is a steal. This is a long hold in my opinion.
Will tight Bollinger Bands make her dance...?Among the end-user segment, the consumer sub-segment is expected to undergo the highest growth by growing at a CAGR of 20.9% during the forecast period. The growth of this segment is mostly due to the growing use of UAV drones by consumers for numerous uses. The report analyzes the global UAV drone market across several regions such as North America, Europe, Asia Pacific, and LAMEA. Among these, the North America UAV Drone Market is expected to lead the global market by growing at a CAGR of 17.5% during the estimated timeframe. The growth of this regional market is mainly due to the increasing usage of drones in the commercial sector in this region for numerous operational uses like delivering products to the consumers at their particular location.
Global UAV Drone Market Projected to Surpass $55,649.0 Million, Growing at 19.9% CAGR from 2020 to 2027
UAVsAeroVironment, Inc. is an American defense contractor headquartered in Arlington, Virginia, that is primarily involved in unmanned aerial vehicles (UAVs) (Wikipedia)
I have been eyeing the military industry for some time, but the stocks have never reached the price I would take. Anyway, AeroVironment looks among the best in the sector from both technical and fundamental perspectives.
The technicals:
There is a double top pattern that developed itself into a triangle. The bottom is specified by two significant lows exceeding a round number 100.0 to the downside. The most significant gap is in the location too.
I expect a lot of liquidity below the yellow rectangle. If we ever reach there without an overall market crash, I'll create the entry there. It's probably the last line of DEFENSE against the bear market. Remember, that the big players need that extra liquidity to open a significant position.
The fundamentals:
The drones were used in recent conflicts against both a professional army and militia/guerrilla force with great success. Even though, the army makes it clear that UAVs are not a replacement for any part of the military, the spendings on both the research and the development increases over time (Statista).
However, the coronavirus might cause some material issues, and increases in spending might be halted (Ibisworld), it is a kind of technology the US will not want to fall behind in. Well, it has already started to fall behind as Turkey develops the first 'dronecraft carrier'. I think the cuts are rather to hit other parts of the defense sector.
I like AeroVironment specifically because, with its focus on UAVs, it is likely to fight for the contracts in this category most hard and the price is as a result derived mostly from this growing part of the sector.
The crash:
The question is if there is enough time for the buying opportunity to develop & profit from before the markets crash. I will be looking for an opportunity between 95-100$, but might not decide to invest at all in the end.
UAVS looking Saucy....I made a key code of the price action then found an exact match to this move in the past.... one that matched at lease 95% or better. That way if the move is that close to the same shape we have now it must mean the sentiment of the market was the same at that time. Therefore, the outcome should be the same coming out of the move. I then used PTP which is Past Trend Prediction by tracing the trend it made after this move in the past and projecting it forward on to the current move.
Then I took the same move on the Daily which is a different Time frame then the first..and found the same move with out a key and traced its path and projected it forward as well.
Sometimes I use about 5 other Price Action tricks I have have developed over the last 10 months or chart out the Curve and what Stage it is in. The Curve is my own brain child and I compare that to Wycoff method. Taking all of these into account You have several different approaches to confirming direction and intent of the institutional buyers and where Retail resides during this move.
If you would like to have more information or videos on Any of the ways I chart pls comment below. Like, follow, Subscribe...share.
Thank you,
iCantw84it
06.07.2021
Bullish spinning top & +12.5% PreMarket -- Rocket Emojis?Linking my previous analysis below. I said I would load up on a few more shares if this touches the $6 range with broader market pressure, and guess what, IT DID (pre market yesterday). The lowest I caught it was around $6.85
But, the stock has closed the day with a bullish spinning top candlestick. Coming from a week of pressure, this is a great sign of a possible trend reversal.
The stock is up touching $9 pre-market today (up nearly 12.5%), which is a better entry that my previous analysis suggested. As marked on the chart, it will need to break the $9.90- $10 resistance, which was a previous support and recent resistance for the stock. If we see the volume today, this is possible. RISK: The only main risk I see at this stage (considering this dip price) is if broader market pressure continues.
If you would like to see more on fundamentals behind this company, please check the previous analysis.
Good luck traders!
$UAVS - If I liked it in the 6's...UAVS is way oversold IMO. I have bought in and sold UAVS for profits a few times now. The first time I bought in was in the low 6's. If I liked it at 6...waiting for funds to settle, I may add a full position to UAVS again tomorrow. I am already holding a (losing) 1/4 position on it now. But I think it's time to go all in again. Will see tomorrow.
$UAVS massive correction into wave 3? Please take a look at $UAVS
That was by far the most perfect Elliot Wave I've seen ( Yellow Numbers) - All waves corresponded perfectly to the rules, wave 3 is 1.618 of wave 1 just sooo good. and wave 5 is 0.618 of wave 1+3 such a perfect landing...
Now what we observe is a massive correction, which is counted as Elliot wave ( maybe zig-zag?)
There are levels of retracement 0.618 & 0.768 which are typical landing for corrective wave 2.
If the whole structure is 1 & 2 on the daily chart then wave 3 is expected to land at ~30$
Key Stats:
Revenue Change TTM +828.97%
Gross Margin TTM -189.68%
Price/Sales 179.61
Appeared to be overvalued, but does it matter for Innovative Company in 2021???
Comment below
Can UAVS Fly Again? I am long from $8.95. This a great set up where we have completed 5 obvious waves up with a ABC correction into the 0.618 fib level, structure area and the bottom of wave 4. Also, we have formed a morning star with todays gap up. Also, not pictured I have counted the waves down into Wave C, which finished at the projected level. Stocks should also rebound at least in the short term. Target is open.
UAVS in a channelLooks like there is lot of support at the green line and the 20MA line. I'm just letting it ride until it no longer holds. I can see 20USD in March happening, maybe late February. They have a lot of stuff going on (i know vaguely description but i don't want to mention it all, just google ageagle aerial systems and press on the news button) and the market cap is still low. This is a keeper for me.