Kepler downgrades Melrose Industries to 'hold'
By Michele Maatouk
Date: Thursday 26 Jun 2025
(Sharecast News) - Kepler Cheuvreux downgraded Melrose Industries to 'hold' from 'buy' on Thursday, as it said there is no longer enough upside to justify the 'buy' rating.
Kepler said it expects "no miracles" on sales and margins when the company reports first-half results on 1 August.
It said free cash flow is set to remain negative at -€70-100m, given the continued cash drain from restructuring, GTF recall costs, and variable considerations.
"Meanwhile, we cut our estimates to reflect US dollar weakness and higher interest costs, expecting pending tariff costs of £10-15m to be absorbed by underlying Engines margin gains," it said.
Kepler said its target price of 540p still aims for a 6% free cash flow yield on the group's 2029 £0.6bn FCF target.
At 1550 BST, the shares were down 1.3% at 513.40p.
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