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

BAE Systems Plc

MS International Plc

Chemring Group Plc

Melrose Industries Plc

Senior Plc

Cohort Plc

Bodycote Plc

Thruvision Group Plc

Velocity Composites Plc

QinetiQ Group 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 2.52 times

Poor long term growth as Operating profit has grown by an annual rate 65.63% of over the last 5 years
Low ability to service debt as the company has a high Debt to EBITDA ratio of 2.52 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 65.63% of over the last 5 years

Positive results in Jun 25

ROCE(HY) Highest at 10.69%
OPERATING PROFIT(Q) Highest at GBP 377 MM
OPERATING PROFIT MARGIN(Q) Highest at 21.92 %

With ROE of 8.06%, it has a fair valuation with a 2.38 Price to Book Value

Over the past year, while the stock has generated a return of -8.15%, its profits have risen by 65% ; the PEG ratio of the company is 0.4

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Melrose Industries Plc should be less than 10%
Overall Portfolio exposure to Aerospace & Defense should be less than 30%

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

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Melrose Industries Plc for you?

High Risk, Low Return

Absolute

Risk Adjusted

Volatility

Melrose Industries Plc

-8.49%

-0.63

34.15%

FTSE 100

13.98%

1.15

13.60%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-18.16%

EBIT Growth (5y)

65.63%

EBIT to Interest (avg)

0.75

Debt to EBITDA (avg)

2.52

Net Debt to Equity (avg)

0.48

Sales to Capital Employed (avg)

0.86

Tax Ratio

53.77%

Dividend Payout Ratio

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

2.38

EV to EBIT

23.56

EV to EBITDA

11.11

EV to Capital Employed

1.92

EV to Sales

2.39

PEG Ratio

0.42

Dividend Yield

47.83%

ROCE (Latest)

8.14%

ROE (Latest)

8.06%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

Mildly Bearish

RSI

No Signal

Bollinger Bands

Bearish

Moving Averages

Mildly Bullish (Daily)

KST

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

12What is working for the Company

ROCE(HY)

Highest at 10.69%

OPERATING PROFIT(Q)

Highest at GBP 377 MM

OPERATING PROFIT MARGIN(Q)

Highest at 21.92 %

DIVIDEND PAYOUT RATIO(Y)

Highest at 10.77%

RAW MATERIAL COST(Y)

Fallen by -201.3% (YoY

PRE-TAX PROFIT(Q)

Highest at GBP 121 MM

EPS(Q)

Highest at GBP 0.22

-7What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at GBP 55 MM

INTEREST(HY)

At GBP 62 MM has Grown at 37.78%

DEBT-EQUITY RATIO (HY)

Highest at 58.66 %

Here's what is working for Melrose Industries Plc

Operating Profit

Highest at GBP 377 MM and Grown

In each period in the last five periods

MOJO Watch

Near term Operating Profit trend is quite positive

Operating Profit (GBP MM)

Operating Profit Margin

Highest at 21.92 % and Grown

In each period in the last five periods

MOJO Watch

Company's profit margin has improved

Operating Profit to Sales

Pre-Tax Profit

At GBP 121 MM has Grown at 95.16%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (GBP MM)

Pre-Tax Profit

Highest at GBP 121 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (GBP MM)

EPS

Highest at GBP 0.22

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (GBP)

Dividend Payout Ratio

Highest at 10.77%

in the last five years

MOJO Watch

Company is distributing higher proportion of profits generated as dividend

DPR (%)

Raw Material Cost

Fallen by -201.3% (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 55 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

At GBP 62 MM has Grown at 37.78%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (GBP MM)

Debt-Equity Ratio

Highest at 58.66 % 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