Citi resumes coverage of Melrose with a 'buy'

The bank also set a target price of 480p for the blue chip, which acquired GKN in 2018 in an £8bn hostile takeover. Last week it spun out GKN’s automotive business as Dowlais Group, leaving it exclusively focused on aerospace.

Citi said it did not expect any further diversification away from aerospace, adding: "We expect margin improvement to be driven by the ongoing recovery in the aero cycle, benefits from the near-complete restructuring programmes and, most importantly, the reaping of benefits from past investments in risk and revenue sharing partnerships within the engines business."

It added that an upcoming capital markets day on 17 May "should shine a light on this opportunity" as well as delivering new financials disclosure between engines and structures.

As at 1400 BST, shares in the Melrose were off 3% at 391.05p.