Morningstar

Melrose Industries PLC MRO

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Stock XLON Rating as of
GBX 460.90 −10.30 (2.19%)
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As of Delayed Price Post-Trading: —

Company Report

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We Lowered Melrose's Fair Value Estimate Due to Supply Chain Issues, Capacity Constrains

Loredana Muharremi

Melrose Industries, through GKN Aerospace, is a leading engine and structure components supplier, with 70% of its revenue coming from long-term contracts in which the company is the sole-source provider. In the engine segment, the company has a well-balanced portfolio across narrow-body and wide-body aircraft, acting as a Tier 1 supplier with established positions on 90% of active engines, with risk and revenue-sharing partnerships for 74% of them. The company is a long-term partner with all engine original equipment manufacturers such as Pratt & Whitney, GE, Safran, and Rolls-Royce.

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Price vs Fair Value

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MRO is trading at a 153% premium.
Price
GBX 471.20
Fair Value
GBX 299.00
Uncertainty
Medium
1-Star Price
GBX 374.00
5-Star Price
GBX 918.00
Economic Moat
Kphg
Capital Allocation
Zbhjyds

Bulls Say, Bears Say

Bulls

Supplying 90% of the in-service global engines fleet with a strong focus on narrow-body aircraft, GKN is well positioned to capitalize on long-term structural industry growth.

Bears

Further technical issues from in-service GTF engines could hit margins and the ramp-up of production.

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News

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Trading Information

Previous Close Price
GBX 471.20
Day Range
GBX 455.70–470.90
52-Week Range
GBX 434.12–681.20
Bid/Ask
GBX 445.40 / GBX 711.00
Market Cap
GBX 595.02 Bil
Volume/Avg
4.6 Mil / 6.7 Mil

Key Statistics

Price/Earnings (Normalized)
19.83
Price/Sales
1.87
Dividend Yield (Trailing)
1.17%
Dividend Yield (Forward)
1.17%
Total Yield
6.74%

Company Profile

Melrose Industries is a UK-based company that manufactures engines and structures products for all major OEMs across civil and defense markets. The company derives around 75% of its revenue from civil and the remaining from defense.In the civil market, the company operates in 90% of existing fleets in service and is a demonstrator partner in the GTF and CFM RISE next-generation engines for narrow-body aircraft.
Sector
Industrials
Industry
Specialty Industrial Machinery
Stock Style Box
Mid Growth
Total Number of Employees
17,234
Website
https://www.melroseplc.net

Competitors

Valuation

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Metric
MRO
MTX
SAF
Price/Earnings (Normalized)
 19.8328.2131.15
Price/Book Value
 2.034.978.00
Price/Sales
 1.872.743.59
Price/Cash Flow
 22.4316.2423.75
Price/Earnings
MRO
MTX
SAF

Financial Strength

Metric
MRO
MTX
SAF
Quick Ratio
 0.530.850.54
Current Ratio
 0.861.180.88
Interest Coverage
 −0.18−1.7714.80
Quick Ratio
MRO
MTX
SAF

Profitability

Metric
MRO
MTX
SAF
Return on Assets (Normalized)
 4.50%6.27%4.78%
Return on Equity (Normalized)
 9.25%20.96%21.62%
Return on Invested Capital (Normalized)
 7.85%14.77%13.05%
Return on Assets
MRO
MTX
SAF

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