No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Citi reiterated its 'buy' rating on Melrose Industries on Friday as it said it "presents a compelling investment opportunity", sending shares in the aerospace manufacturing firm higher.
The bank, which has a 735p price target on the stock, acknowledged investor concerns regarding variable consideration impacting free cash flow.
"However, Melrose forecasts cash flow directly from expected shop visits/deliveries, with EBIT derived from cash," it said.
"We continue to believe the strength of the business lies in the strong, long-term cash generation from RRSPs, which supports the company's projected free cash flow of 600m in FY29."
Citi noted that the stock is now trading at a significant discount to peers, even adjusting for increased risk.
"We therefore believe Melrose presents a compelling investment opportunity."
At 1005 GMT, the shares were up 2.2% at 507.20p.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.