Melrose (GB:MRO)
LSE:MRO
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Melrose
(LSE:MRO)
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Rating:62Neutral
Price Target:
505.00 p
▼(-10.97% Downside)
Action:Reiterated
Date:03/02/26
The score is driven primarily by improving fundamentals and upbeat, quantified 2026 guidance (growth, margin expansion, and higher free cash flow), partially offset by weak/volatile cash conversion and higher leverage. Technicals are a notable drag due to the stock trading below major moving averages, while valuation is broadly neutral with only modest dividend support.
Positive Factors
High-margin Engines Division
A high-margin, fast-growing Engines division (OE and aftermarket) provides durable earnings and cash potential. Strong RSP/repair momentum and double-digit top-line gains mean repeatable revenue streams from OEMs and in‑service fleets, supporting structural profitability and competitive positioning.
Negative Factors
Volatile and light cash generation
Inconsistent operating cash flow and weak cash conversion create a durable constraint on reinvestment, deleveraging and shareholder returns. Even with a return to positive FCF in 2025, volatility versus earnings undermines confidence in sustained free cash flow to support buybacks and capex.
Read all positive and negative factors
Positive Factors
Negative Factors
High-margin Engines Division
A high-margin, fast-growing Engines division (OE and aftermarket) provides durable earnings and cash potential. Strong RSP/repair momentum and double-digit top-line gains mean repeatable revenue streams from OEMs and in‑service fleets, supporting structural profitability and competitive positioning.
Read all positive factors
Melrose (MRO) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£5.93B
Dividend Yield1.1%
Average Volume (3M)3.64M
Price to Earnings (P/E)16.0
Beta (1Y)1.65
Revenue Growth3.49%
EPS GrowthN/A
CountryUK
Employees12,291
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.29
Shares Outstanding1,246,684,600
10 Day Avg. Volume4,107,689
30 Day Avg. Volume3,638,056
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)2.65
Price to Sales (P/S)2.09
P/FCF Ratio58.47
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£569.00Price Target Upside0.32% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)0.37
Revenue Forecast (FY)£3.86B
Melrose Business Overview & Revenue Model
Company Description
Melrose Industries PLC engages in the aerospace, automotive, powder metallurgy, and other industrial businesses in the United Kingdom, rest of Europe, North America, and internationally. Its Aerospace segment provides airframe and engine structure...
How the Company Makes Money
Melrose makes money primarily by selling aerospace and defense components and systems to aircraft and engine manufacturers (OEMs) and, to a lesser extent, to maintenance/repair/overhaul providers and other aerospace customers. Its revenue model is...
Melrose Earnings Call Summary
Earnings Call Date:Feb 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 31, 2026
Earnings Call Sentiment Positive
The call underscores strong execution: double-digit segment growth in Engines, meaningful margin expansion, positive free cash flow achieved, transformation largely complete, clear 2026 guidance and reiterated 2029 targets. Headwinds remain — supply chain and tariff risks, GTF cash drag until 2028, powder metal remediation costs, a site-level productivity issue and elevated factoring/inventory that temporarily trap cash. Management presented remediation plans and reiterated confidence in hitting long-term targets, and the volume of positive operational and financial developments outweighs the identified challenges.Positive Updates
Group Revenue and Profit Growth
Group revenue grew 8% like-for-like to GBP ~3.8bn; group operating profit increased 23% to GBP 647m; adjusted operating margin rose to 18% (up 240 bps year-on-year) and EPS increased 25% to 32.1p.
Negative Updates
Supply Chain and Tariff Disruption
Persistent industry-wide supply chain issues constrained civil OEM production (notably impacting Airframes civil volumes, -2% in civil) and caused tariff-related disruption in H1; management cautioned that new tariffs could disrupt 2026 guidance.
Read all updates
Q4-2025 Updates
Positive
Negative
Group Revenue and Profit Growth
Group revenue grew 8% like-for-like to GBP ~3.8bn; group operating profit increased 23% to GBP 647m; adjusted operating margin rose to 18% (up 240 bps year-on-year) and EPS increased 25% to 32.1p.
Read all positive updates
Company Guidance
Guidance was given at $1.37/£: 2026 revenue is guided to £3.750–3.950bn (midpoint ≈ +10% like‑for‑like), group operating profit £700–750m (midpoint ≈ +16%, margin ≈19%); Engines op. profit £565–595m (midpoint includes ~£360m variable consideration, margins ≈33%); Airframes expected high single‑digit LFL growth with op. profit £170–190m (≈9% margin). PLC costs ~£35m (c.£3m non‑cash LTIP). Free cash flow after interest & tax £150–200m (midpoint £175m), cash interest ≈£130m, capex ~1.2x depreciation & amortisation, cash tax ≈4% of adjusted PBT, powder‑metal cash impact ~£50m in 2026 (total expected within £200m), no material restructuring cash in 2026; net debt £1.4bn (leverage 1.8x) and target leverage 1.5–2x, cash flow back‑weighted to H2, and a new £175m 12‑month share buyback was announced.Melrose Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
61
Positive
Cash Flow
46
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.59B | 3.47B | 3.35B | 7.54B | 6.65B |
| Gross Profit | 668.00M | 822.00M | 654.00M | 571.00M | 410.00M |
| EBITDA | 1.02B | 392.00M | 385.00M | 146.00M | 324.00M |
| Net Income | 370.00M | -49.00M | -1.02B | -292.00M | -500.00M |
Balance Sheet | |||||
| Total Assets | 7.60B | 7.44B | 6.93B | 13.99B | 14.02B |
| Cash, Cash Equivalents and Short-Term Investments | 166.00M | 88.00M | 58.00M | 355.00M | 473.00M |
| Total Debt | 1.90B | 1.65B | 822.00M | 1.86B | 1.74B |
| Total Liabilities | 4.75B | 4.59B | 3.36B | 6.79B | 6.46B |
| Stockholders Equity | 2.83B | 2.84B | 3.57B | 7.13B | 7.51B |
Cash Flow | |||||
| Free Cash Flow | 128.00M | -244.00M | -66.00M | -31.00M | 81.00M |
| Operating Cash Flow | 214.00M | -121.00M | 29.00M | 267.00M | 317.00M |
| Investing Cash Flow | -82.00M | -68.00M | 721.00M | 129.00M | 2.46B |
| Financing Cash Flow | -58.00M | 219.00M | -966.00M | -599.00M | -2.47B |
Melrose Technical Analysis
Negative
567.20
Price Trends
504.32
Negative
555.68
Negative
575.36
Negative
Market Momentum
-9.05
Positive
41.20
Neutral
22.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:MRO, the sentiment is Negative. The current price of 567.2 is above the 20-day moving average (MA) of 490.64, above the 50-day MA of 504.32, and below the 200-day MA of 575.36, indicating a bearish trend. The MACD of -9.05 indicates Positive momentum. The RSI at 41.20 is Neutral, neither overbought nor oversold. The STOCH value of 22.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:MRO.
Melrose Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | £7.41B | 31.44 | 13.71% | 1.93% | -31.27% | -13.26% | |
71 Outperform | £6.61B | 27.26 | 24.91% | 1.29% | 4.25% | 29.89% | |
67 Neutral | £2.49B | 21.94 | 20.10% | 2.04% | 3.03% | 13.76% | |
64 Neutral | £6.25B | 25.72 | 13.42% | 1.26% | 2.35% | -20.96% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | £5.93B | 16.00 | 13.03% | 1.10% | 3.49% | ― | |
60 Neutral | £5.16B | 31.45 | 13.86% | 2.46% | 2.26% | -14.63% |
* Industrials Sector Average
GB:MRO
Melrose
470.70
8.84
1.91%
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Melrose Corporate Events
Regulatory Filings and Compliance
Melrose Non-Executive Director Increases Stake With Share Purchase
Positive
May 27, 2026
Melrose Industries PLC disclosed that non-executive director Gillian Elcock purchased 1,987 ordinary shares in the company on 22 May 2026 at a price of 503 pence per share on the London Stock Exchange. Following this acquisition, Elcock’s to...
Business Operations and Strategy
Melrose Eases Safety Concerns as GKN’s Garden Grove Plant Moves Into Recovery Phase
Positive
May 27, 2026
Melrose Industries has provided an update on its GKN Aerospace Garden Grove facility in California after recent disruption, confirming that local authorities have lifted the last mandatory evacuation orders, leaving only a small temporary restrict...
Business Operations and Strategy
Melrose’s GKN Aerospace Contends With Chemical Incident at Key U.S. Plant
Negative
May 26, 2026
Melrose’s GKN Aerospace unit is managing an incident at its Garden Grove, California facility involving a storage tank containing methyl methacrylate, a chemical used in high-strength aerospace acrylics. The site, which employs around 500 pe...
Business Operations and StrategyStock Buyback
Melrose Adds to Buyback as Treasury Shareholding Rises
Positive
May 26, 2026
Melrose Industries PLC has continued its share buyback activity, purchasing a total of 326,874 ordinary shares between 18 May and 22 May 2026 on the London Stock Exchange at volume-weighted average prices ranging from about 481p to 507p. The compa...
Business Operations and StrategyStock Buyback
Melrose boosts treasury stock with latest share buyback
Positive
May 18, 2026
Melrose Industries has repurchased 325,000 ordinary shares between 11 and 15 May 2026 via Merrill Lynch International on the London Stock Exchange, at volume-weighted average prices ranging from about 475p to 501p. The company plans to hold all of...
Business Operations and StrategyStock Buyback
Melrose boosts treasury stock with latest share buyback
Positive
May 11, 2026
Melrose Industries has repurchased a total of 136,638 of its ordinary shares between 5 and 8 May 2026 via Merrill Lynch International, at volume-weighted average prices ranging from about 483p to 513p. The company plans to hold these shares in tre...
Other
Melrose Director Increases Stake With £24,400 Share Purchase
Positive
May 8, 2026
Melrose Industries PLC disclosed that non-executive director Mary Petryszyn purchased 5,000 ordinary shares in the company on 5 May 2026 at 488 pence per share on the London Stock Exchange. The transaction, which lifts her total holding to 25,000 ...
Regulatory Filings and Compliance
Melrose Director Heather Lawrence Increases Shareholding with £96,906 Purchase
Positive
May 5, 2026
Melrose Industries has disclosed that non-executive director Heather Lawrence purchased 20,080 ordinary shares in the company on 30 April 2026 at 482.6 pence per share, bringing her total holding to 27,580 shares. The transaction, carried out on t...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest Share Buyback
Positive
May 5, 2026
Melrose Industries PLC has repurchased 315,000 of its own ordinary shares on the London Stock Exchange between 27 April and 1 May 2026, at volume-weighted average prices ranging from about 475p to 496p per share. The company plans to hold all of t...
Business Operations and StrategyExecutive/Board Changes
Melrose Industries Names Ross McCluskey as New CFO and Director
Neutral
May 5, 2026
Melrose Industries PLC has appointed Ross McCluskey as Chief Financial Officer and Director, effective 5 May 2026, following an earlier announcement in February. He succeeds Matthew Gregory, who has stepped down from both roles as part of the plan...
Other
Melrose Directors Boost Shareholdings in Vote of Confidence
Positive
May 1, 2026
Melrose Industries reported that three board members have increased their personal holdings in the company’s ordinary shares, signaling strengthened alignment between the directors and shareholders. Non-executive director Guy Hachey bought 1...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresShareholder Meetings
Melrose Wins Strong Shareholder Backing for All AGM Resolutions
Positive
Apr 29, 2026
Melrose Industries reported that all 21 resolutions at its 29 April 2026 annual general meeting were approved by shareholders, with around 81% of issued share capital voting. Investors backed the 2025 financial statements, a final dividend of 4.8 ...
Business Operations and StrategyFinancial Disclosures
Melrose lifts Q1 profit and holds 2026 guidance despite Middle East uncertainty
Positive
Apr 29, 2026
Melrose Industries reported an 11% rise in first-quarter revenue, driven by 20% growth in its Engines division and 4% growth in Airframes, which together pushed adjusted operating profit for the group and both divisions well ahead of last year. En...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest Share Buyback Tranche
Positive
Apr 27, 2026
Melrose Industries PLC has continued its share buyback programme, repurchasing a total of 300,386 ordinary shares between 20 April and 24 April 2026 on the London Stock Exchange through Merrill Lynch International at volume-weighted average prices...
Business Operations and StrategyStock Buyback
Melrose Expands Treasury Stock With Further Share Buybacks
Positive
Apr 20, 2026
Melrose Industries PLC has continued its share buyback programme, repurchasing a total of 284,135 ordinary shares between 13 and 17 April 2026 on the London Stock Exchange via Merrill Lynch International at volume-weighted average prices ranging f...
Business Operations and StrategyStock Buyback
Melrose boosts capital returns with latest share buyback
Positive
Apr 13, 2026
Melrose Industries has been actively managing its capital structure through a share buyback programme executed via Merrill Lynch International on the London Stock Exchange. The company repurchased 180,000 ordinary shares across three trading days ...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with April Share Buybacks
Positive
Apr 7, 2026
Melrose Industries has repurchased 49,410 of its ordinary shares on the London Stock Exchange over 1–2 April 2026, at volume-weighted average prices of about 521.64p and 519.51p respectively, via Merrill Lynch International. The company will...
Business Operations and StrategyStock Buyback
Melrose Completes £250m Buyback and Launches New £175m Programme
Positive
Apr 1, 2026
Melrose Industries has completed its previously announced £250 million share buyback programme, having repurchased more than 45 million ordinary shares since October 2024 and now holding 62.9 million shares in treasury out of a total 1.25 bil...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Late-March Share Buybacks
Positive
Mar 30, 2026
Melrose Industries has continued its share buyback programme, repurchasing ordinary shares through Investec Bank between 20 and 26 March 2026 at volume-weighted average prices ranging roughly from 488p to 503p. The company plans to hold these repu...
Executive/Board ChangesRegulatory Filings and Compliance
Melrose CFO Boosts Shareholding via Bonus Deferral Scheme
Positive
Mar 26, 2026
Melrose Industries has disclosed that its Chief Financial Officer, Matthew Gregory, has increased his stake in the company through the purchase of 46,702 ordinary shares on 25 March 2026. The shares were bought at 502.47 pence each under the group...
Financial DisclosuresRegulatory Filings and ComplianceShareholder Meetings
Melrose Publishes 2025 Annual Report and Sets April AGM Date
Neutral
Mar 23, 2026
Melrose Industries PLC has published its Annual Report and financial statements for the year ended 31 December 2025, along with the Notice of Annual General Meeting and Form of Proxy, making these documents available to shareholders via its invest...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest Share Buyback Round
Positive
Mar 23, 2026
Melrose Industries has repurchased 553,160 of its ordinary shares on the London Stock Exchange between 13 and 19 March 2026, at volume-weighted average prices ranging from about 491p to 518p. The company plans to hold these shares in treasury, a m...
Executive/Board ChangesRegulatory Filings and Compliance
Melrose Grants CEO Long-Term Performance Share Award
Positive
Mar 20, 2026
Melrose Industries has granted chief executive Peter Dilnot an award over 591,205 ordinary shares under its 2024 Performance Share Plan, structured as a nil-cost option. The award will vest on 19 March 2029, subject to performance conditions, unde...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest Share Buyback
Positive
Mar 13, 2026
Melrose Industries has repurchased 148,789 of its ordinary shares on 12 March 2026 via Investec Bank at prices between 513.20p and 539.00p, with a volume-weighted average price of 527.9547p. The shares will be held in treasury, leaving 61,760,161 ...
Business Operations and StrategyStock Buyback
Melrose adds to treasury with latest £0.001 ordinary share buyback
Positive
Mar 12, 2026
Melrose Industries has continued its share buyback activity, repurchasing 149,142 ordinary shares on 11 March 2026 via Investec Bank at prices between 522.80p and 534.20p, with a volume-weighted average of 528.1711p. The company plans to hold thes...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest Share Buyback
Positive
Mar 11, 2026
Melrose Industries PLC has continued its share buyback activity, repurchasing 154,405 ordinary shares on 10 March 2026 via Investec Bank at a volume‑weighted average price of 536.0382 pence, with prices ranging between 530.00 and 541.40 penc...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest Share Buyback
Positive
Mar 10, 2026
Melrose Industries PLC has repurchased 147,549 of its ordinary shares on 9 March 2026 via Investec Bank at prices between 510p and 522.2p, with a volume‑weighted average of 517.5021p. The company intends to hold these shares in treasury, ref...
Business Operations and StrategyStock Buyback
Melrose Adds to Buyback Programme With Further Treasury Share Purchase
Positive
Mar 9, 2026
Melrose Industries has continued its share buyback activity, repurchasing 187,391 ordinary shares on 6 March 2026 via Investec Bank at prices between 539.60p and 553.20p, with a volume-weighted average of 547.0582p. The company plans to hold these...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest £0.56 Buyback Tranche
Positive
Mar 6, 2026
Melrose Industries PLC has continued its share buyback activity, repurchasing 182,508 ordinary shares on 5 March 2026 via Investec Bank at prices ranging between 545.00p and 571.20p, with a volume-weighted average price of 556.1629p. The repurchas...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest Share Buyback
Positive
Mar 5, 2026
Melrose Industries PLC has continued its share buyback programme, repurchasing 190,332 ordinary shares on 4 March 2026 via Investec Bank at prices between 524.40p and 559.40p, with a volume-weighted average price of 540.5904p. The shares will be h...
Regulatory Filings and Compliance
Melrose Chair Chris Grigg Increases Stake with £96,000 Share Purchase
Positive
Mar 4, 2026
Melrose Industries PLC disclosed that its non-executive chair, Chris Grigg, and his wife Fionna jointly purchased 17,901 ordinary shares in the company on 4 March 2026 at 539.52 pence per share. The transaction lifts their combined holding to 63,6...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest Share Buyback
Positive
Mar 4, 2026
Melrose Industries PLC has continued its share buyback activity, purchasing 182,473 ordinary shares on 3 March 2026 via Investec Bank at a volume-weighted average price of about 540 pence, within a trading range of 529.2 to 562.6 pence. The compan...
Regulatory Filings and Compliance
Melrose Director Increases Stake with £111,840 Share Purchase
Positive
Mar 4, 2026
Melrose Industries PLC disclosed that non-executive director Mary Petryszyn purchased 20,000 ordinary shares in the company on 3 March 2026 at 559.20 pence per share, giving her a stake of about 0.002% of the issued share capital. The director sha...
Business Operations and StrategyStock Buyback
Melrose Adds to Treasury Stock with Latest Share Buyback
Positive
Mar 3, 2026
Melrose Industries PLC has repurchased 178,685 of its ordinary shares on 2 March 2026 via Investec Bank at prices ranging between 539.80p and 564.60p, with a volume-weighted average price of 554.7643p. The company plans to hold these shares in tre...
Executive/Board Changes
Melrose Director Ian Barkshire Named Chair Designate at Focusrite
Positive
Mar 2, 2026
Melrose Industries PLC has announced that non-executive director Ian Barkshire has been appointed as a non-executive director and chair designate of Focusrite plc, a listed audio equipment company. The move signals an expansion of Barkshire’...
Business Operations and StrategyStock Buyback
Melrose Adds 1.2m Shares to Treasury in Latest Buyback
Positive
Mar 2, 2026
Melrose Industries has repurchased 1,225,000 of its ordinary shares on 27 February 2026 through Investec Bank at a volume-weighted average price of about 567.4 pence, with prices ranging between 537.4 pence and 637.2 pence. The shares will be held...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.