Melrose Industries - Fundamentals remain positive

The aerospace sector outlook remains positive, with lengthy order books at the primes (Airbus and Boeing) and total passenger flying hours in 2024 on schedule to exceed post-pandemic levels, supporting a strong aftermarket. The former will assist margin recovery for Melrose Industries’ original equipment (OE) operations, while increased flying hours are already generating strong growth and margin in the aftermarket business. Hence, our adjustment to estimates for external factors, such as FX movements, should not detract investors from focusing on the underlying positive dynamics of the business.