Industrials

Report by Willis Welby

Willis Welby sees the clearest upside in MRO and BA, while remaining more cautious on RR despite strong fundamentals. MRO looks particularly mispriced, with its implied-to-Y3 EBITM ratio of just 28; Willis Welby believes the market is moving on from Garden Grove and sees either a refinancing or takeover as a potential catalyst, with 100%+ upside. BA has pulled back enough to become attractive again, with its ratio falling to 85 despite still-supportive defence spending. RR remains a high-quality business with strong aerospace franchises and growing SMR momentum, but at a ratio of 132 Willis Welby would not chase the shares.

Industrials

Report by Smart Insider

Angela Strank (Non-Executive since 2020) buys £70,000 of stock at £2.69, increasing her stake by 60%. She has made a series of purchases into rising prices since her first buy at £1.44 in Oct 2021 and it's notable to see her now make her largest purchase post strength. It is also her largest purchase across her Director roles at Mondi, Severn Trent and SSE. Stuart Bradie (Non-Executive since May 2023) recently bought £248,000 of stock in his first purchase since joining in 2023. Smart Insider ranks the stock +1 (highest rating).

Industrials

Report by Entext

The stock is up more than 60% since Sean Maher added it to his energy transition basket (+240% since inception in 2019) towards the end of last year as both a power generation capex / China reopening play. RR's strong FY results come ahead of a sweeping restructuring from H2 to boost margins and ROE under its new CEO. Results showed an improvement in its civil aerospace and power systems divisions which is likely to accelerate over the next couple of years while crucially the highly indebted company generated £505m of FCF - smashing analyst expectations and buying time for the new far more commercial business strategy and inevitable recapitalisation to bear fruit.

Industrials - Aerospace and Defence

Report by Forensic Alpha

Rolls-Royce has been a "frequent flyer" at the top of Forensic Alpha’s high-risk list. With the publication of H1 results last month, they picked up even more new working capital flags which has pushed the company back up to the maximum "10" risk rating. The increase in DSI (Days Sales Inventory) was one of the most striking movements, given it came off levels which were already elevated. The movement also appears to be much greater than observed for peers in the Aerospace and Defence sector.