Melrose Industries Plc (MRO) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Rolls-Royce Holdings Plc

QinetiQ Group plc

BAE Systems Plc

MS International Plc

Cohort Plc

Bodycote Plc

Melrose Industries Plc

Chemring Group Plc

Senior Plc

Thruvision Group Plc

Velocity Composites Plc

Why is Melrose Industries Plc ?

Poor Management Efficiency with a low ROCE of 3.44%

The company has been able to generate a Return on Capital Employed (avg) of 3.44% signifying low profitability per unit of total capital (equity and debt)

Low ability to service debt as the company has a high Debt to EBITDA ratio of 2.05 times

Poor long term growth as Operating profit has grown by an annual rate 23.80% of over the last 5 years
Low ability to service debt as the company has a high Debt to EBITDA ratio of 2.05 times
The company has been able to generate a Return on Equity (avg) of 3.94% signifying low profitability per unit of shareholders funds

Poor long term growth as Operating profit has grown by an annual rate 23.80% of over the last 5 years

Flat results in Dec 25

OPERATING CASH FLOW(Y) Lowest at GBP 96 MM
DEBT-EQUITY RATIO (HY) Highest at 61.44 %
INTEREST COVERAGE RATIO(Q) Lowest at 581.43

Below par performance in long term as well as near term

Along with generating -5.67% returns in the last 1 year, the stock has also underperformed FTSE 100 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Aerospace & Defense)

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is Melrose Industries Plc for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Melrose Industries Plc

-5.67%

-0.70

34.39%

FTSE 100

17.87%

1.52

11.77%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-16.36%

EBIT Growth (5y)

23.80%

EBIT to Interest (avg)

0.75

Debt to EBITDA (avg)

2.52

Net Debt to Equity (avg)

0.48

Sales to Capital Employed (avg)

0.72

Tax Ratio

53.77%

Dividend Payout Ratio

24.75%

Pledged Shares

Institutional Holding

0.00%

ROCE (avg)

3.44%

ROE (avg)

3.94%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

2.18

EV to EBIT

19.30

EV to EBITDA

9.70

EV to Capital Employed

1.78

EV to Sales

2.12

PEG Ratio

14.60

Dividend Yield

144.08%

ROCE (Latest)

9.24%

ROE (Latest)

7.98%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

Mildly Bearish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Bearish

Moving Averages

Mildly Bullish (Daily)

KST

Bearish

Mildly Bearish

Dow Theory

Mildly Bearish

OBV

No Trend

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

6What is working for the Company

ROCE(HY)

Highest at 13.05%

RAW MATERIAL COST(Y)

Fallen by -71.89% (YoY

DIVIDEND PER SHARE(HY)

Highest at GBP 3.86

NET SALES(Q)

Highest at GBP 1,869 MM

OPERATING PROFIT(Q)

Highest at GBP 407 MM

-8What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at GBP 96 MM

DEBT-EQUITY RATIO (HY)

Highest at 61.44 %

INTEREST COVERAGE RATIO(Q)

Lowest at 581.43

INTEREST(Q)

Highest at GBP 70 MM

Here's what is working for Melrose Industries Plc

Net Sales

Highest at GBP 1,869 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (GBP MM)

Operating Profit

Highest at GBP 407 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (GBP MM)

Dividend per share

Highest at GBP 3.86

in the last five years

MOJO Watch

Company is distributing higher dividend from profits generated

DPS (GBP)

Raw Material Cost

Fallen by -71.89% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Here's what is not working for Melrose Industries Plc

Operating Cash Flow

Lowest at GBP 96 MM and Fallen

In each year in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (GBP MM)

Interest Coverage Ratio

Lowest at 581.43

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Debt-Equity Ratio

Highest at 61.44 % and Grown

In each half year in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Interest

Highest at GBP 70 MM

in the last five periods and Increased by 12.9% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (GBP MM)