Citi highlights reassuring Melrose Industries site visit
By Michele Maatouk
Date: Tuesday 12 Nov 2024
(Sharecast News) - Citi said in a note on Tuesday that a recent site visit at Melrose Industries' Western Approach highlighted "a number of industry-leading technologies".
The bank said that perhaps most interesting for investors was the presentation on additive manufacturing.
"The CTO's comments underscored the company narrative that this is a key area of opportunity with potential for significant return (more than 20% IRR)," Citi said.
"On Structures, we were incrementally reassured that Melrose has generally retained and invested in Structures business where they have embedded IP, leading manufacturing technologies, and can achieve their targeted margin."
Citi said it remains "high conviction" on the mid-term cash flow and believes this will be the main share price driver, but that Monday's visit was encouraging in highlighting "the underappreciated strengths of the Structures business, as well as the market opportunities the company is positioning itself to capitalise on, in particular within additive manufacturing".
Citi has a 'buy' rating on the shares.
At 1255 GMT, the shares were up 2.1% at 523.80p.
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