Melrose Industries (LON:MRO) Announces Earnings Results

Melrose Industries (LON:MRO) issued its quarterly earnings data on Friday. The company reported GBX 32.20 EPS for the quarter, Digital Look Earnings reports. Melrose Industries had a negative return on equity of 1.18% and a negative net margin of 1.13%.

Here are the key takeaways from Melrose Industries’ conference call:

• In 2025 Melrose delivered a strong set of results — operating profit up 23% to £647m, margins +240bp to 18%, EPS +25% and positive free cash flow of £125m, enabling a 20% higher full‑year dividend.
• Management issued upbeat 2026 guidance (revenue £3.75–3.95bn, operating profit £700–750m, midpoint margin ~19%) and free cash flow guidance of £150–200m, and announced a new £175m 12‑month share buyback.
• The engines division is the clear growth engine — revenue +15%, aftermarket and RSP performance strong (division margin 31.9%), repair business wins and additive fabrication pipeline support a 2028 inflection where GTF is expected to become cash‑positive.
• Airframes growth remains constrained (3% revenue) by ongoing supply‑chain and civil OEM production issues and a productivity problem at a Netherlands site that caused a mid‑to‑low single‑digit profit impact, with remediation planned for 2026.
• Key near‑term risks include powder‑metal/GTF‑related cash costs (£68m in 2025; guidance ~£50m in 2026, total expected within the previously advised £200m) and a larger receivable factoring position (£396m year‑end), while net debt was £1.4bn (1.8x EBITDA).

Melrose Industries Stock Down 11.4%

Shares of LON:MRO opened at GBX 566.76 on Friday. The business has a 50-day moving average price of GBX 625.41 and a 200 day moving average price of GBX 609.61. Melrose Industries has a 12-month low of GBX 376 and a 12-month high of GBX 685. The company has a current ratio of 0.86, a quick ratio of 0.45 and a debt-to-equity ratio of 44.03. The company has a market capitalization of £7.11 billion, a price-to-earnings ratio of 23.04, a PEG ratio of 0.48 and a beta of 1.51.

Wall Street Analysts Forecast Growth

Separately, JPMorgan Chase & Co. raised their price target on shares of Melrose Industries from GBX 600 to GBX 750 and gave the company an “overweight” rating in a research note on Monday, November 17th. Three analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company’s stock. According to data from MarketBeat, Melrose Industries currently has an average rating of “Moderate Buy” and a consensus price target of GBX 692.50.

Melrose Industries Company Profile

Melrose Industries PLC, together with its subsidiaries, provides aerospace components and systems to civil and defence markets in the United Kingdom, rest of Europe, North America, and internationally. The company operates through two segments, Engines and Structures. The Engines segment offers structural engineered components; parts repair; and commercial and aftermarket contracts to engines original equipment manufacturers. The Structures segment provides civil and defence air frames, including lightweight composite and metallic structures; and electrical distribution systems and components to airframe original equipment manufacturers.