Ftse 100 Industrial Stock

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Ftse 100 Industrial Stock

FTSE 100'S Industrial Stock With Massive Potential

There's one industrial stock on the FTSE 100 which has the potential to even outperform Rolls Royce. I am talking about the Melrose Industries (MRO).

The MRO is involved in making transparencies, landing gear, aerostructures, aerospace engine components, and so on. All of these parts and equipment are used in the defense and civil aircraft.

Melrose Industries Acts As Sole Supplier For Oems

In a sense, Melrose Industries acts as the sole source supplier for all the big OEMs around the world. This puts Melrose Industries in a unique position.

Especially in the aerospace industry, it is a big thing to be a sole source supplier. This also allows the firm with that status to earn a premium.

The Melrose is regarded as the T1 supplier and has positions in 90% of the engines (military + commercial) worldwide. Also, the revenue sharing and risk agreements cover around 74% of all the programs.

Despite all the strong numbers, Melrose's share price is still almost nothing when compared with other aerospace stocks. Right now, the forward P/E of Melrose Industries is 14.1.

Every day, 100,000 flights around the world use the technology developed by Melrose Industries. This includes the engine OEMS such as Rolls Royce, GE, Safran, and so on.

So, the Melrose Industries has a pretty diversified and broad customer base. This also helps the company to diversify its income and revenue sources.

The company can also earn revenue through its services of repairs and maintenance. This ensures that they can continue to secure high margin revenue during the market downturns.

However, one key risk for Melrose Industries is the supply chain constraints. This has forced the firm to revise its revenue outlook lower for the year 2025.

Despite all the challenges, Melrose Industries is forecasting a 20% annual increase in earnings. They are forecasting these numbers till the year 2029.

Based on all the fundamentals and the market situation, Melrose Industries appears to be a good stock in the industrial sector.

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