Melrose Industries PLC (LSE:MRO, OTC:MLSPF) will post a third-quarter trading statement in mid-November with its shares still recovering from the hit to high expectations delivered at its final results in March.
Having risen over 20% to around 700p in the first months of the year, following the results, the shares sank below 400p by April.
Though last year's profit surged 42% to £540 million on an 11% increase in revenue to £3.5 billion, analysts and investors were disappointed by guidance being held at £700 million of adjusted operating profit and free cash flow of at least £100 million.
At August's interim results, the outlook was maintained.
Ahead of the Q3 update, analysts at UBS, who have a 'sell' rating on the shares, said they didn't expect the statement will bring any major catalysts for the shares, which currently trade at 593p.
The update, due on 14 November, is expected to see continued themes from the first half, including strength in the RRSP (Risk and Revenue Sharing Partnerships) portfolio and ongoing issues within the Structures division.
"Melrose GKN is an important partner on the A350 program, which industry feedback suggests is seeing production delays," said analysts.
"This is likely to continue to weigh on cash flow and profitability in H2 in our view. Melrose GKN is also an important supplier on the A320 program which is delivering in line with Airbus expectations we believe."
The UBS team believe management will likely reaffirm 2025 guidance for free cash flow and may reiterate its longer-term goal for £600 million of free cash flow by 2029.
While no new guidance for 2026 is expected, commentary could point to further improvement driven by stronger RRSP growth and reduced working capital demands in Structures.
Following minor model changes and a re-rating of peers, UBS lifted its price target from 405p to 410p.