Melrose Industries PLC (MRO.L) stock analysis

In our weekly check, Melrose Industries PLC is graded B (A to F). Of 24 checks on debt, profit, cash flow and trend: 18 pass, warnings: 5, red flags: 1.

About Melrose Industries PLC

Melrose Industries PLC is an Industrials company (Aerospace & Defense) based in the United Kingdom, listed on LSE as MRO.L.

What our checks show for MRO.L

Red flags

• The stock has fallen as much as 72% from a peak. Would you have held through that?

Warning signs

• The net margin fell by 2.2 points over 5 years, to 10.3%: the company keeps less of each sale as profit.
• Operating cash flow is only 0.58x net profit: part of the reported profit does not arrive as cash.
• Free cash flow is only 3.3% of revenue.
• The price swings a lot: 36.7% annual volatility. Expect large ups and downs.
• Return on capital (ROCE) is only 6%.

Strengths

• The gross margin is 26.6% and has risen by 13 points: pricing power is holding.
• Analysts expect earnings per share to grow about 23.4% a year over the next years.
• Analysts expect the net margin to improve by 4.6 points from today's 10.3%.
• Earnings per share grew 11.8% a year over the last 3 years.
• The dividend takes 17% of profit: there is a cushion.
• The share count fell by 5.7% in 2 years: the company buys back its own shares.

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Questions

What grade does Melrose Industries PLC (MRO.L) have?

In our weekly check, Melrose Industries PLC is graded B (A to F). Of 24 checks on debt, profit, cash flow and trend: 18 pass, warnings: 5, red flags: 1. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of MRO.L stock?

This week's biggest flags for Melrose Industries PLC: Deep past fall, Margins falling, Profits not backed by cash. In total 6 of 24 checks show a warning or a red flag.

What does Melrose Industries PLC do?

Melrose Industries PLC is an Industrials company (Aerospace & Defense) based in the United Kingdom, listed on LSE as MRO.L.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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