This Melrose Industry The company’s (LSE:MRO) share price has had its ups and downs this year.

It has fallen sharply from a record closing level of 677.6 pence per share seen in April. In fact FTSE100 The company fell again on Thursday (1 August) after publishing its half-year sales results.

At 539.2 pence per share, Melrose shares are currently trading 8.4% lower in today’s session.

But what has caused investors to start charging exit fees? And is the recent stock price decline a buying opportunity?

Strong first half

Melrose did indeed put in a solid first half, as figures showed today. In fact, revenues for the six months to June beat City forecasts.

Revenue rose by 6.7% in the period to £1.7bn. This meant adjusted operating profit rose by 55.3% year-on-year to £247m.

Once again, sales and profits generated by Aerospace operations continue to impress. Engines sales increased by 21%, while Structures revenues increased by 6%, helped by mighty aftermarket activity and robust demand from defense customers.

Adjusted operating margins in the Aerospace segment increased 420 basis points to 14.9%, with margins in the Engines segment beating forecasts thanks to a mighty aftermarket segment.

As a result, Aerospace’s adjusted operating profit rose by 48.5% year-on-year to £260m.

…but turbulence on the supply side

The bad news for Melrose’s share price is that markets are looking to the future. So while those first-half numbers were solid, investors haven’t been kind to the business Also cutting revenue forecasts for 2025.

Footsie said it remains on track to meet profit targets over the next two years. This is despite “Current Supply Chain Challenges Across the Industry” for its aviation and astronautics division.

However, Melrose now expects full-year revenue from Aerospace to be around £3.8bn next year, down from a previous forecast of £4bn.

The market was less moved by the company raising its adjusted operating margin guidance for 2025 to 18%. That’s up from the previously forecast 17%-18%.

Buying at the top?

So what are we to make of Melrose and the share price decline? Well, first of all, it’s critical to note that the company’s shares are up almost a third in 12 months to record highs in April.

So it’s uncomplicated to see why some investors might be tempted to cash in on profits in recent weeks. Indeed, news of supply chain issues — an ongoing problem across the aerospace sector — has given them more reason to cash out.

The recent share price weakness, however, is not a reflection of Melrose’s long-term earnings prospects. In fact, the company’s focus on aerospace gives it a good chance of achieving market-beating earnings potential.

Strong demand from defense customers is likely to continue as countries take rapid action to retool. Business should also benefit from continued growth in the global commercial aviation fleet as passenger numbers soar. In this landscape, sales of spare parts and components should take off.

And Melrose stock looks significantly cheaper than another aerospace engineer’s stock Rolls RoyceThe company’s price-to-earnings (P/E) ratio is 20.1, which is significantly lower than the 32.5 times for Rolls shares.

In conclusion, I think Melrose could be a great potential buy on the downside for patient investors. Especially at current prices.