Why Leonardo DRS Stock Was Tumbling on Thursday
Key Points
Two analysts cut their price targets on the defense company.
While those reductions weren't drastic, they added to the generally downbeat post-earnings sentiment on the stock.
- 10 stocks we like better than Leonardo DRS ›
On the second-to-last trading day of the week, investors weren't willing to go on offense with defense stock Leonardo DRS (NASDAQ: DRS). On the back of two bearish post-earnings adjustments by analysts, its shares were sliding by almost 6% in late-session action. That was a notably steeper drop than the S&P 500 index's 0.6% decline at that point.
A day of drops
This came one day after Leonardo DRS released its third-quarter earnings, and that wasn't a coincidence. A pair of pundits tracking the company's fortunes weighed in with price target cuts in their reevaluations of its potential.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Image source: Getty Images.
Both Morgan Stanley's Kristine Liwag and Truist Securities's Michael Ciarmoli got out the scissors on Thursday.
Each snipped $2 from their previous price target for a new level of $45 per share for Liwag and $47 for Ciarmoli. The two pundits continued to differ on the stock's attractiveness, however, with Liwag maintaining her hold recommendation and Ciarmoli standing firm on his buy.
Lofty expectations
It wasn't immediately apparent why the two analysts clipped their price targets, but the reaction mirrors that of the broader market on Wednesday -- the day Leonardo DRS's released those quarterly numbers.
Although the company is benefiting from beefed-up defense spending globally and beat on the consensus revenue and earnings numbers, it feels like investors were expecting even more of a blowout quarter. The bar has been raised high for defense stocks lately, after all.
Should you invest $1,000 in Leonardo DRS right now?
Before you buy stock in Leonardo DRS, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Leonardo DRS wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $593,442!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,269,127!*
Now, it’s worth noting Stock Advisor’s total average return is 1,071% — a market-crushing outperformance compared to 196% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of October 27, 2025
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
