Marie-Ange Riggio, an analyst from Morgan Stanley, maintained the Hold rating on Melrose (MRO – Research Report). The associated price target is p590.00.
Marie-Ange Riggio has given her Hold rating due to a combination of factors that reflect both strengths and challenges for Melrose Industries. The company’s financial performance for FY24 showed strong profitability and cash flow improvements, with adjusted operating profit and free cash flow exceeding expectations. This was largely driven by a robust aftermarket performance and effective fleet management in the aerospace sector.
However, despite these positive financial results, there are underlying challenges that temper the outlook. The revenue guidance for 2025 has been adjusted downward due to ongoing supply chain issues, and the recent significant increase in share price suggests that much of the positive news may already be reflected in the current valuation. Additionally, while the company has set ambitious targets for the future, the reliance on variable consideration in profitability remains a concern. These factors collectively support a cautious approach, justifying the Hold rating.
Based on the recent corporate insider activity of 9 insiders, corporate insider sentiment is neutral on the stock.
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