MTU Aero Engines (MTUAY) AI Stock Analysis

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MTU Aero Engines

(OTC:MTUAY)

Rating:72Outperform

Price Target:―

MTU Aero Engines scores a 72, reflecting strong financial performance with healthy revenue and profit growth. However, increased leverage and declining free cash flow present risks. The technical analysis indicates potential short-term weakness, while the high P/E ratio suggests possible overvaluation.

MTU Aero Engines (MTUAY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$21.19B

Dividend Yield0.62%

Average Volume (3M)1.80K

Price to Earnings (P/E)30.9

Beta (1Y)0.76

Revenue Growth38.28%

EPS GrowthN/A

CountryUS

Employees12,892

SectorIndustrials

Sector Strength87

IndustryAerospace & Defense

Share Statistics

EPS (TTM)N/A

Shares Outstanding107,648,980

10 Day Avg. Volume0

30 Day Avg. Volume1,805

Financial Highlights & Ratios

PEG Ratio0.33

Price to Book (P/B)1.77

Price to Sales (P/S)0.00

P/FCF Ratio16.51

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$204.00

Price Target Upside3.59% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering1

MTU Aero Engines Business Overview & Revenue Model

Company DescriptionMTU 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 MoneyMTU Aero Engines generates revenue through several key streams. The primary source of income is its commercial maintenance division, which provides maintenance, repair, and overhaul (MRO) services for commercial aircraft engines. This segment is crucial as airlines outsource these services to ensure operational efficiency and compliance with safety regulations. Additionally, MTU earns revenue from its OEM operations by designing and manufacturing engine components for new aircraft, often in collaboration with major engine and airframe manufacturers. The military engine services sector also contributes to the company's earnings through contracts with government and defense organizations for the development, production, and servicing of military engines. Strategic partnerships with global aerospace leaders like Pratt & Whitney and General Electric further enhance MTU's market presence and revenue potential by integrating its technologies into a wider range of engine platforms.

MTU Aero Engines Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 7.91%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant revenue growth and strategic expansions in the MRO segment, along with progress in the GTF Advantage program. However, uncertainties due to U.S. tariffs and currency exchange rate impacts were notable concerns. Despite these challenges, the company's financial performance showed strong improvements in EBIT and net income.

Q1-2025 Updates

Positive Updates

Strong Revenue Growth

Group revenues for Q1 2025 reached nearly €2.1 billion, marking a 25% increase from last year. In U.S. dollar terms, revenues rose by 22%.

GTF Advantage Program Milestones

The GTF Advantage received FAA certification in February 2025, with initial deliveries to Airbus on track for later this year. The engine offers 4% to 8% more take-off thrust and lower fuel consumption.

MRO Expansion

Opened the second MRO shop in China and expanded North American footprint, introducing MRO services for LEAP-1A and 1B engines, which represents a multibillion-dollar revenue potential.

Improved EBIT and Net Income

Adjusted EBIT increased 38% to €300 million with a margin of 14.3%. Adjusted net income improved 41% to €221 million.

Positive Free Cash Flow

Free cash flow for Q1 2025 was strong at €150 million.

Negative Updates

Uncertainty from U.S. Tariffs

U.S. tariffs create significant confusion and uncertainty, especially impacting U.S. partners and MTU's profitability, with potential impacts in the mid- to high-digit million euro range.

Currency Exchange Rate Impact

Adjusted revenue guidance in euros was reduced due to recent exchange rate developments, with the updated forecast now based on a U.S. dollar-euro exchange rate of $1.10.

Strike at Arlington Facility

Potential impacts on GTF deliveries and powdered metal parts production due to a strike at the TX, Arlington facility, though details were not yet clear.

Company Guidance

During the MTU Q1 2025 results call, guidance for the fiscal year was updated with a focus on several key metrics. Adjusted revenue for 2025 is now expected to be between €8.3 billion and €8.5 billion, revised from the previous range of €8.7 billion to €8.9 billion due to recent exchange rate developments. The outlook is based on a U.S. dollar-euro exchange rate of $1.10. Despite the revision in revenue, guidance for adjusted EBIT and adjusted net income remains unchanged. Additionally, the company is confident in achieving a free cash flow between €250 million and €300 million. The guidance does not incorporate potential impacts from the volatile tariff environment affecting global markets. The company remains optimistic about its strategic initiatives and growth prospects, supported by robust market demand and ongoing expansions.

MTU Aero Engines Financial Statement Overview

Summary

MTU Aero Engines exhibits a strong financial profile with significant revenue growth and improving profit margins. While profitability and equity returns are healthy, increased leverage and declining free cash flow need monitoring.

Income Statement

Very Positive

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

Positive

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

Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
6.22B	7.41B	5.36B	5.33B	4.19B	3.98B
	Gross Profit
-569.00M	1.23B	117.00M	855.00M	586.00M	492.00M
	EBIT
-1.18B	882.00M	0.00	546.00M	408.00M	268.00M
	EBITDA
52.50M	1.47B	196.00M	864.00M	720.00M	591.00M
	Net Income Common Stockholders
-640.00M	633.00M	-102.00M	331.00M	222.00M	139.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.24B	2.60B	1.54B	1.21B	885.00M	811.00M
	Total Assets
10.96B	12.48B	10.20B	9.23B	8.30B	8.10B
	Total Debt
1.67B	2.43B	1.27B	1.30B	1.31B	1.45B
	Net Debt
521.00M	682.00M	389.00M	479.00M	587.00M	674.00M
	Total Liabilities
7.84B	9.05B	7.27B	6.12B	5.54B	5.47B
	Stockholders Equity
3.04B	3.36B	2.86B	3.03B	2.68B	2.55B
Cash Flow		Free Cash Flow
505.00M	74.00M	365.00M	326.00M	200.00M	130.00M
	Operating Cash Flow
689.00M	714.00M	777.00M	728.00M	567.00M	386.00M
	Investing Cash Flow
-341.00M	-603.00M	-420.00M	-400.00M	-345.00M	-245.00M
	Financing Cash Flow
-185.00M	736.00M	-294.00M	-224.00M	-276.00M	504.00M

MTU Aero Engines Technical Analysis

Technical Analysis Sentiment

Positive

Last Price196.93

Price Trends

50DMA

179.46

Positive

100DMA

177.05

Positive

200DMA

169.45

Positive

Market Momentum

MACD

5.16

Positive

RSI

56.08

Neutral

STOCH

16.28

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MTUAY, the sentiment is Positive. The current price of 196.93 is below the 20-day moving average (MA) of 198.21, above the 50-day MA of 179.46, and above the 200-day MA of 169.45, indicating a neutral trend. The MACD of 5.16 indicates Positive momentum. The RSI at 56.08 is Neutral, neither overbought nor oversold. The STOCH value of 16.28 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTUAY.

MTU Aero Engines Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BWXT	76 Outperform	$12.59B	43.90	28.24%	0.72%	9.87%	14.16%
CW	74 Outperform	$17.84B	42.10	17.40%	0.18%	9.77%	15.66%
MTUAY	72 Outperform	$21.19B	30.93	20.61%	0.62%	38.28%	―
WWD	72 Outperform	$13.98B	37.49	16.35%	0.48%	4.96%	8.41%
LOAR	70 Outperform	$7.80B	218.92	4.62%	―	27.03%	562.31%
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%
SPR	37 Underperform	$4.32B	―	81.63%	―	-2.91%	-109.95%

* Industrials Sector Average

Performance Comparison

MTUAY

MTU Aero Engines

196.93

76.93

64.11%

Curtiss-Wright

473.32

202.94

75.06%

SPR

Spirit AeroSystems

36.82

6.35

20.84%

WWD

Woodward

232.06

48.60

26.49%

BWXT

BWX Technologies

138.07

47.70

52.78%

LOAR

Loar Holdings Inc.

83.41

24.02

40.44%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.