Leonardo DRS initiated with a Neutral at JPMorgan

JPMorgan initiated coverage of Leonardo DRS with a Neutral rating and $23 price target. The analyst expects growth and margin expansion and believes the company can trade at a premium to large cap defense contractors, where portfolios are less concentrated in growth areas and margin expansion is tougher. However, a portion of this is already in Leonardo’s valuation, and its acquisition focused capital deployment strategy adds uncertainty, the analyst tells investors in a research note.