Leonardo's stock price plummeted 6%, rumors of a CEO transition triggered volatility

Investing.com - Leonardo shares fell about 6% on Tuesday, after media reports said that the defense group’s CEO, Roberto Cingolani, will be replaced when his term expires in May.

According to Italian newspapers La Repubblica and Il Fatto Quotidiano, Lorenzo Mariani, CEO of MBDA Italia, is the frontrunner to take over the role. Mariani has served as the deputy general manager under Cingolani until 2025.

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An analyst at Italian brokerage Equita said the decision would be surprising, given Leonardo’s strong performance during Cingolani’s tenure.

Bloomberg also cited sources as saying that Alessandro Ercolani of Rheinmetall Italia and Stefano Donnarumma of Italy’s state railway company (Ferrovie dello Stato) are also among the main candidates.

Reports say the board is expected to vote on the matter on May 7, and the list of candidates must be submitted by next Monday.

The leadership decision comes amid a broader reshuffling of personnel at Italy’s major state-related companies, and the process has been made more complicated by Giorgia Meloni’s weakened political standing after her failed referendum last month.

The setback prompted her to demonstrate decisiveness through a series of changes, including a cabinet reshuffle, with the tourism minister being replaced.

Bloomberg cited the escalation of the conflict in the Middle East as another factor shaping her thinking, as the strategic importance of the defense sector continues to rise.

Before today’s pullback, Leonardo’s share price is up nearly 27% year-to-date, outperforming the broader Italian market.

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