Melrose Industries could benefit from aerospace and defense sector performance

From Morningstar: 2025-06-20 03:06:00

UK investors are closely monitoring Rolls-Royce’s record high performance in aerospace and defense. Melrose Industries, a FTSE 100-listed jet engine parts supplier, could be another strong contender. Despite a 13% decline in shares this year, Melrose is positioned to benefit from the ongoing engine refresh cycle in airlines and UK defense spending commitments. Morningstar analyst raised their fair value estimate on Melrose’s stock to 800p, citing confidence in its business model and sector tailwinds. Despite double-digit growth in revenue and operating profit in 2024, Melrose’s share price has been subdued due to supply chain challenges. However, Morningstar believes the shares are significantly undervalued based on their fair value estimate.



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