Leonardo Stock And Two European Defensives With Resilient Earnings

European equities are back in focus as the Stoxx 600 holds its ground in 2026 with a 10% gain, even after fiscal scares, tariffs and energy shocks. That resilience, paired with sectors seen as less exposed to Chinese import pressure, is pulling fresh attention to value stocks with steadier earnings profiles. This article walks through 3 stocks from a Pan European value screener that appear well positioned for this backdrop.

The stocks covered next are just a sample from this Pan European value screen. The full results surface 9 more companies with similarly grounded earnings stories that are not discussed here. To identify and analyze those additional opportunities in one place, head straight to the Pan-European Value Stocks (Ex-Autos) Benefiting from Resilient Earnings screener.

Leonardo (BIT:LDO)

Leonardo is a €34.6b Italian industrial and technology group that supplies helicopters, military and training aircraft, defense electronics, cyber security and space systems across Europe, the US and other international markets. The largest revenue contributors are Defence Electronics & Security at about €9.1b and Helicopters at about €6.0b, followed by the Aeronautics business at about €4.3b and smaller lines in space, cyber security and other activities.

Leonardo sits at the heart of the European aerospace and defense sector, which has been getting fresh interest as investors look for companies with long contracts and less exposure to Chinese import pressure. Orders in the first half of 2026 grew strongly and management has lifted guidance for EBITA and free cash flow. Margins in electronics and helicopters are already in double digits. The flip side is lingering weakness in the Aerostructures division and the execution risk that comes with acquisitions and a capacity ramp up. For investors willing to weigh those trade offs, the recent guidance upgrade and sector tailwinds indicate that there is more to the Leonardo story than the headline numbers reveal.

Leonardo’s upgraded guidance and double digit margins suggest that the headline story might be understating its earnings power. Get the full picture with the analysis report for Leonardo

Build your own earnings resilience shortlist

Leonardo and the other two stocks in this list all came from the same screener, which shows how quickly you can surface ideas with specific earnings and balance sheet traits. Use our flexible Screener to mix filters such as valuation, growth and risk, or tap into ready made themes through our Investing Ideas.

Dassault Aviation société anonyme (ENXTPA:AM)

Dassault Aviation société anonyme designs and builds Rafale fighter jets, Falcon business jets and space systems for customers in France, the United States and other international markets. The company reports about €8.9b in aerospace sector revenue, which covers both its defense and business aviation activities. With a market cap of roughly €24.6b, Dassault Aviation société anonyme sits among the larger listed European aerospace and defense companies.

Investors looking at Dassault Aviation société anonyme are getting exposure to a mix of government backed defense programs and high end business jets at a time when European aerospace and defense stocks are seen as relatively insulated from Chinese import pressure. The Rafale backlog, fresh export contracts and progress on future space mobility concepts such as VORTEX and nEUROn point to long term program depth. On the other side of the ledger, supply chain strain, trade barriers that could affect access to the key US jet market and execution risk around new Falcon models mean delivery schedules and margins still need close watching.

Rafale exports and Falcon jet ambitions put Dassault Aviation société anonyme in a different bracket for long term aerospace exposure. Yet the real story sits inside the 4 key rewards and 1 important warning sign

Telefónica (BME:TEF)

Telefónica is a €20.7b Madrid based telecom group that provides mobile, fixed line, broadband and Pay TV services, plus cloud, cybersecurity, IoT and AI solutions for households, businesses and public bodies across Spain, Brazil, Germany and the UK. The largest revenue contributors are Telefónica Spain at about €13.2b, Telefónica Brazil at about €10.0b, Telefónica Germany at about €7.8b, with a further €6.7b from other companies and group activities after eliminations. This mix gives Telefónica a broad, multi country earnings base anchored in three of Europe’s biggest telecom markets.

Telefónica sits right in the sweet spot of the current Stoxx 600 story. It is a large, incumbent telecom in a sector that recent research highlights as relatively insulated from Chinese import competition, and it operates in three of Europe’s biggest markets where management sees “great opportunities” and a “new time in Europe” for communications infrastructure. At the same time, the stock still reflects concerns about high debt, competitive pressure and a business that is working to move past weak profitability. For investors hunting value with earnings resilience, the key question is how that tension between cash generation and balance sheet strain is evolving under the surface.

Telefónica’s broad cash generating footprint and heavy debt load create a situation in which apparent strength might be masking something more important. Get the full picture through the Telefónica financial health report

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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