MTU Aero Engines (MTUAY) AI Stock Analysis

• Market Cap: $22.82B
• Dividend Yield: 0.6%
• Average Volume (3M): 514.00
• Price to Earnings (P/E): 24.6
• Beta (1Y): 0.71
• Revenue Growth: 46.08%
• EPS Growth: N/A
• Country: US
• Employees: 12,892
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): N/A
• Shares Outstanding: 107,648,980
• 10 Day Avg. Volume: 587
• 30 Day Avg. Volume: 514
• PEG Ratio: -0.04
• Price to Book (P/B): 5.33
• Price to Sales (P/S): 2.42
• P/FCF Ratio: 242.36
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 3.25
• Enterprise Value/Gross Profit: 15.67
• Enterprise Value/Ebitda: 17.41
• 1Y Price Target: $262.00
• Price Target Upside: 28.17% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $245.00 ▲(19.85% Upside)

MTU Aero Engines has a strong financial performance and positive earnings call highlights, driving the overall score. However, technical indicators and valuation suggest caution, with potential overvaluation and neutral momentum.

Positive Factors

Revenue Growth

MTU Aero Engines' strong revenue growth indicates robust demand for its products and services, enhancing its market position and supporting long-term business expansion.

Margin Improvement

The significant improvement in EBIT margin reflects effective cost management and operational efficiency, contributing to sustainable profitability.

Expanding MRO and OEM Segments

Growth in MRO and OEM segments underscores MTU's strong market position and ability to capture ongoing demand, supporting future revenue streams.

Negative Factors

Increased Leverage

Higher leverage may limit financial flexibility and increase risk, potentially impacting MTU's ability to invest in growth opportunities.

Declining Free Cash Flow

The significant decline in free cash flow raises concerns about liquidity and the company's ability to fund operations and growth initiatives.

Military Revenue Decline

A decline in military revenues could affect MTU's diversification and revenue stability, especially if delays persist, impacting long-term growth prospects.

MTU Aero Engines Business Overview & Revenue Model

Company Description

MTU Aero Engines AG, together with its subsidiaries, develops, manufactures, markets, and maintains commercial and military engines, and aero derivative industrial gas turbines in Germany, other European countries, North America, Asia, and internationally. It operates through two segments, Commercial and Military Engine Business; and Commercial Maintenance Business. The company offers commercial aircraft engines for wide body jets, narrow body and regional jets, and business jets; military aircraft engines for fighter aircraft, helicopters, and transport aircraft; and industrial gas turbines. It also maintains, repairs, and overhauls commercial and military engines; and manufactures and markets various brush seals. The company was formerly known as MTU Aero Engines Holding AG and changed its name to MTU Aero Engines AG in May 2013. MTU Aero Engines AG was founded in 1913 and is headquartered in Munich, Germany.

How the Company Makes Money

MTU Aero Engines generates revenue through several key streams. Primarily, the company earns money from the sale of new aircraft engines to commercial and military customers. This includes both the initial manufacturing of engines and associated components. In addition to engine sales, MTU has a robust maintenance, repair, and overhaul (MRO) segment, which provides ongoing service for engines in operation, contributing a significant portion of its revenue through long-term contracts and service agreements. The company also benefits from partnerships and collaborations with other aerospace firms, including joint ventures that enhance its market reach and technological capabilities. Furthermore, MTU invests in research and development, which not only helps in creating innovative products but also positions the company for future growth in the aerospace sector.

MTU Aero Engines Financial Statement Overview

Summary

MTU Aero Engines shows strong financial performance with significant revenue growth and improved profit margins. However, increased leverage and declining free cash flow present some risks.

Income Statement

MTU Aero Engines has demonstrated strong revenue growth with a 38.2% increase from 2023 to 2024. The gross profit margin improved significantly from 2.2% in 2023 to 16.7% in 2024, indicating better cost management. Net profit margin turned positive to 8.5% in 2024 from a negative position in 2023. However, the EBIT margin is missing for the latest year, which affects the comprehensive assessment of operational efficiency.

Balance Sheet

The company's debt-to-equity ratio increased to 0.72 in 2024, up from 0.44 in 2023, suggesting higher leverage but still within a manageable range. The return on equity improved to 18.8% in 2024, indicating strong profitability relative to shareholder equity. The equity ratio stands at 26.9%, reflecting a stable capital structure. Overall, the balance sheet shows strength with some caution on increased leverage.

Cash Flow

Free cash flow showed a decrease from 2023 to 2024, dropping by 79.7%, which is a concern for liquidity. The operating cash flow to net income ratio was 1.13 in 2024, indicating good cash conversion from profits. However, free cash flow to net income ratio is low at 0.12, suggesting a need for improvement in cash generation relative to profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.97B	7.41B	5.36B	5.33B	4.19B	3.98B
Gross Profit	1.65B	1.23B	117.00M	855.00M	586.00M	492.00M
EBITDA	1.49B	1.47B	196.00M	723.00M	519.00M	467.00M
Net Income	982.00M	633.00M	-102.00M	331.00M	222.00M	139.00M
Balance Sheet
Total Assets	11.78B	12.48B	10.20B	9.23B	8.30B	8.10B
Cash, Cash Equivalents and Short-Term Investments	2.19B	2.60B	1.54B	1.21B	885.00M	811.00M
Total Debt	2.03B	2.43B	1.27B	1.30B	1.31B	1.45B
Total Liabilities	7.87B	9.05B	7.27B	6.12B	5.54B	5.47B
Stockholders Equity	3.84B	3.36B	2.86B	3.03B	2.68B	2.55B
Cash Flow
Free Cash Flow	37.00M	74.00M	365.00M	326.00M	200.00M	130.00M
Operating Cash Flow	357.00M	714.00M	777.00M	728.00M	567.00M	386.00M
Investing Cash Flow	-301.50M	-603.00M	-420.00M	-400.00M	-345.00M	-245.00M
Financing Cash Flow	368.00M	736.00M	-294.00M	-224.00M	-276.00M	504.00M

MTU Aero Engines Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 204.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTUAY, the sentiment is Neutral. The current price of 204.42 is below the 20-day moving average (MA) of 205.19, below the 50-day MA of 215.14, and above the 200-day MA of 201.66, indicating a neutral trend. The MACD of -3.61 indicates Negative momentum. The RSI at 45.01 is Neutral, neither overbought nor oversold. The STOCH value of 66.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MTUAY.

MTU Aero Engines Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RTX	76 Outperform	$229.41B	35.13	10.49%	1.56%	8.79%	39.63%
NOC	75 Outperform	$78.35B	19.71	26.15%	1.64%	-0.14%	72.35%
MTUAY	73 Outperform	$22.82B	24.61	23.85%	0.60%	46.08%	―
GE	73 Outperform	$299.50B	37.86	42.74%	0.48%	-19.21%	31.83%
LHX	70 Neutral	$52.09B	29.90	9.13%	1.72%	2.83%	47.00%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BA	47 Neutral	$153.46B	―	―	―	10.19%	-6.03%

MTU Aero Engines Corporate Events

MTU Aero Engines Reports Strong Nine-Month Earnings Growth

Looking ahead, MTU Aero Engines AG is optimistic about its financial trajectory, expecting a mid-twenties percentage increase in adjusted EBIT for 2025 and free cash flow between €350 and €400 million. The company maintains its revenue outlook, projecting €8.6 to €8.8 billion for the year, with all business areas contributing to growth. MTU remains committed to advancing its technological capabilities and maintaining its competitive edge in the aviation industry.

MTU Aero’s Earnings Call: Strong Growth Amid Challenges

MTU Aero’s recent earnings call painted a picture of optimism and resilience, highlighting strong revenue and EBIT growth alongside robust free cash flow and positive market trends. Despite facing challenges such as a decline in military revenues, supply chain issues, and a weaker U.S. dollar, the company expressed confidence in its ability to seize growth opportunities in the future.