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MRO:LSEMelrose Industries PLC Analysis

Data as of 2026-06-14 - not real-time

£462.50

Latest Price

6/10Risk

Risk Level: Medium

Executive Summary

Melrose Industries is trading well below its short‑term, intermediate and long‑term moving averages, with a bearish MACD crossover and shrinking volume, signaling a short‑term downside bias. Fundamentally, the stock appears significantly undervalued – its price‑to‑earnings multiple sits far beneath the industry average and the discounted cash‑flow model suggests a large upside potential. Revenue is growing at a healthy clip, earnings are accelerating, and the dividend payout is modest, supporting sustainability despite a moderate debt load.
Recent market chatter shows sharp intra‑week swings, reflecting heightened volatility, yet the underlying business fundamentals and valuation gap provide a compelling case for medium‑ to long‑term investors to consider accumulation.

Market Outlook

Short Term

< 1 year
Neutral
Model confidence: 5/10

Key Factors

  • Price below all key moving averages
  • Bearish MACD and decreasing volume
  • Elevated short‑term volatility and mixed daily price moves

Medium Term

1–3 years
Positive
Model confidence: 7/10

Key Factors

  • Substantial valuation gap versus DCF fair value
  • PE multiple well under industry peers
  • Accelerating earnings and modest, sustainable dividend

Long Term

> 3 years
Positive
Model confidence: 9/10

Key Factors

  • Long‑run aerospace demand and diversified geographic exposure
  • Solid free cash flow generation supporting dividend and debt servicing
  • Moderate leverage and low beta indicating defensive characteristics

Key Metrics & Analysis

Financial Health

Revenue Growth8.30%
Profit Margin10.31%
P/E Ratio15.9
ROE13.05%
ROA4.96%
Debt/Equity67.56
P/B Ratio2.1
Op. Cash Flow£214.0M
Free Cash Flow£476.0M
Industry P/E30.6

Technical Analysis

TrendBearish
RSI44.3
Support£443.36
Resistance£511.20
MA 20£471.61
MA 50£496.71
MA 200£573.02
MACDBearish
VolumeDecreasing
Fear & Greed Index89.86

Valuation

Fair Value£579.38
Target Price£683.53
Upside/Downside47.79%
GradeUndervalued
TypeBlend
Dividend Yield1.56%

Risk Assessment

Beta0.64
Volatility38.43%
Sector RiskMedium
Reg. RiskMedium
Geo RiskMedium
Currency RiskLow
Liquidity RiskLow

This analysis may contain inaccuracies and is provided for informational and research purposes only. It is not personal investment advice, a recommendation, or an instruction to buy, sell, or hold any asset.