Summary
Jefferies elevated Italian shipbuilder Fincantieri SpA to a buy rating from hold and set a new target price of €19 per share, pointing to record defense orders and a faster cash generation cycle as reasons the stock appears undervalued. At the time of the update, shares were trading at €13.50, implying roughly 41% upside to the broker's target.
Balance sheet and capital measures
The upgrade followed the Venice-headquartered company’s recent completion of a €500 million rights issue. Jefferies said the capital raise improves the balance sheet ahead of Fincantieri’s 2026-2030 business plan and expands strategic flexibility for potential acquisitions within the underwater defense space. The broker described the shares as not fully appreciated by the market and pointed to deleveraging, better profitability and backlog execution as sources of longer-term upside.
Backlog, orders and 2025 results
Fincantieri closed 2025 with a record backlog of €63.2 billion and visibility extending to 2037. The company posted a net profit of €117 million and recorded an order intake of €20.3 billion in the year, both noted as all-time highs.
Jefferies' financial outlook
The broker forecast EBITDA of €700.9 million for 2026, increasing to €1.25 billion by 2030. Jefferies expects margins to expand from approximately 7.5% at present toward a 10% target over that period, driven primarily by growth in the defense and underwater divisions. The broker anticipates those divisions will represent about one-third of group revenues by 2030.
Defense revenues are projected by Jefferies to grow at an 18% compound annual rate through 2026-30, roughly double the group’s overall target of an 8% CAGR, a dynamic the broker attributes to accelerating European naval spending under the EU’s SAFE facility and various bilateral procurement programmes.
Leverage, cash flow and capital expenditure
Entering the plan period, net debt to EBITDA was approximately 2.6 times. Jefferies expects that leverage ratio to decline to about 1 times by 2030, supported by an anticipated €2.4 billion in cumulative operating cash flow over the five years. That forecasted cash generation is expected to fully cover €1.9 billion in planned capital expenditure during the same timeframe.
The broker also indicated that dividends could resume from 2028, dependent on results for 2027.
Valuation scenarios
Jefferies presented a downside scenario which applies lower EBITDA margins in line with the 2020-25 average, producing a fair value estimate of €9.50 per share - a figure the broker described as about a 30% discount to current levels. Its bull case, which removes the peer discount applied in the base case, implies a price of €25 per share.
Implications
The broker's upgrade centers on three interlinked drivers: a strengthened balance sheet after the rights issue, a record and long-dated defense backlog, and forecasts of margin expansion backed by cash generation and deleveraging through the 2026-2030 plan period. These elements form the foundation for Jefferies' base, downside and bull valuation scenarios.
Additional note
The information above reflects Jefferies' published views and the company-reported financial and order data cited.