Education
About Us
Working with TipRanks
Follow Us
MTU Aero Engines (MTUAY)
OTHER OTC:MTUAY
Top Page
MTU Aero Engines
(OTC:MTUAY)
Select Model
Select Model
Rating:73Outperform
Price Target:
$245.00
▲(7.42% Upside)
Action:ReiteratedDate:10/31/25
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 (MTUAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.51B
Dividend Yield0.59%
Average Volume (3M)514.00
Price to Earnings (P/E)27.2
Beta (1Y)0.68
Revenue Growth46.08%
EPS GrowthN/A
CountryUS
Employees12,892
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)N/A
Shares Outstanding107,648,980
10 Day Avg. Volume587
30 Day Avg. Volume514
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)5.33
Price to Sales (P/S)2.42
P/FCF Ratio242.36
Enterprise Value/Market Cap0.90
Enterprise Value/Revenue2.65
Enterprise Value/Gross Profit12.81
Enterprise Value/Ebitda14.23
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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. 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 Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented a strongly positive operational and financial performance for 2025—record revenue, margin expansion, all-time high free cash flow, major capacity and technology milestones, and an ambitious 2026 guidance—while acknowledging tangible near-term headwinds from the GTF fleet management cash burden, ramp-up inventory impacts (notably Fort Worth), supply-chain delays and ongoing customer/partner delivery negotiations. Overall, the company is investing for long-term profitable growth with a solid balance sheet, but some execution and cash-timing risks remain in the short term.Q4-2025 Updates
Positive Updates
Record Revenue
Group revenues increased 16% to EUR 8.7 billion in 2025, a new company record and in line with updated guidance.
Strong Profitability and Margin Expansion
Adjusted EBIT rose 29% to EUR 1.35 billion, yielding a margin of 15.5%; adjusted net income increased 27% to EUR 968 million.
All-time High Free Cash Flow
Free cash flow reached a record EUR 378 million in 2025, exceeding previous peaks despite the GTF fleet management plan.
Material Dividend Increase
Proposed dividend increased 64% to EUR 3.60 per share for 2025 (payout ratio ~20%), signalling progress toward the 40% target.
Robust Order Book and New Orders
Order book stands at EUR 29.5 billion (sold out ~3 years); more than USD 2 billion in new commercial orders in 2025 across GTF, GEnx and GE9X.
GTF Program Strength and Fleet Metrics
GTF commitments exceed 13,000 engines; 2025 saw >1,500 customer orders/commitments; GTF family has >50 million flight hours, >2,600 aircraft and enabled ~2.8 billion gallons fuel saved.
Product & Certification Milestones
GTF Advantage received FAA and EASA certification; Hot Section Plus retrofit announced by Pratt & Whitney; first GE9X deliveries targeted (though entry into service shifted).
MRO Network Expansion
Capacity investments: EME Aero (Poland) second test cell (500 GTF shop visits/yr from 2028), MTU Zhuhai total capacity >700 shop visits/yr, Fort Worth expansion to support LEAP/GE engines and full disassembly/assembly/testing.
Improved Financial Position & Hedging
Net debt ~EUR 1.1 billion with net debt/EBITDA <1; hedge coverage ~80% of net USD exposure for 2026 at an average rate of 1.13; Moody's upgraded to Baa2 and Fitch confirmed BBB.
Sustainability & Operational Energy Milestone
New Munich geothermal plant operating since Dec 2025 (covers ~80% of heating needs); target to reduce CO2 emissions 63% by 2035 vs 2024; EcoVadis silver medal awarded.
Negative Updates
GTF Fleet Management Cash Burden
Company recorded ~USD 360 million in airline compensation payments in 2025 related to the GTF fleet management plan, with remaining payments expected into 2026 and beyond, pressuring near-term cash flow.
Prefinance Receivables and Working Capital Drag
Growing pre-finance receivables for shop visits (reported as other financial assets) reduced 2025 cash conversion and are expected to continue building up over the coming years, delaying cash benefits.
Ramp-up and Inventory Headwinds (Fort Worth)
Fort Worth LEAP MRO ramp-up requires material inventory build-up, cited as a high-double-digit headwind to 2026 free cash flow and expected to continue while facility scales.
OEM Delivery Mix & Guidance Misses
Organic commercial OE growth in USD was ~10% for 2025—below mid-teens guidance—driven by delivery plan differences across partnerships; Q4 OEM growth and mix constrained by installed vs spare mix.
Commercial MRO Margin Pressure
Q4 commercial MRO adjusted EBIT fell 11% to EUR 123 million (margin 7.4%) due to a higher GTF MRO share and Fort Worth ramp-up costs; full-year MRO margin 8%.
Supply Chain Disruptions and Military OEM Delays
Supply delays limited expected military OEM growth in some plants; consortium complexity in military programs amplified impacts and caused some spillovers into 2026.
Customer Dispute / Delivery Negotiations
Public disagreement between Pratt & Whitney/Airbus regarding GTF deliveries created uncertainty about allocations and delivery timing; negotiations ongoing without a public resolution.
Currency Headwinds and Sensitivity
Weaker USD was a headwind in 2025 (revenues up only 16% in EUR vs 21% in USD); EUR 0.05 USD exchange movement would affect EBIT by ~EUR 20 million despite hedging activity.
GE9X / B777X Timing Uncertainty
Official B777X entry into service delayed to 2027, which has required inventory build-up and creates timing uncertainty for associated OE/MRO revenue recognition.
Ongoing GTF Operational Issues and Elevated Spare Engine Ratio
GTF-related AOG and durability issues necessitate retrofits (e.g., Hot Section Plus) and elevated spare & lease engine ratios that are expected to remain higher than historical norms, weighing on margins and cash conversion in the near term.
Company Guidance
MTU guided 2026 group revenues of EUR 9.2–9.7 billion (assumes USD/EUR 1.20) and adjusted EBIT of EUR 1.35–1.45 billion (consistent with its 2030 margin corridor of 14.5%–15.5%), with adjusted net income expected to grow broadly in line with EBIT; cash conversion is forecast to improve to 45%–55% (up from 39% in 2025, when free cash flow was EUR 378 million). Management expects organic U.S. dollar OE revenues to rise in the mid‑ to high‑teens, organic commercial spare‑parts growth in the low‑ to mid‑teens, MRO U.S. dollar growth in the low‑ to mid‑teens, and military revenue growth in the mid‑teens, with GTF MRO representing 40%–45% of MRO revenues. The company has hedged around 80% of its 2026 net USD exposure at an average rate of 1.13 (a EUR 0.05 USD move ≈ EUR 20 million EBIT), reports net debt of ~EUR 1.1 billion (net debt/EBITDA <1, target leverage 0.5–1.5), will propose a EUR 3.60 dividend per share (+64% y/y; 20% payout ratio toward a 40% target), and notes headwinds to 2026 free cash flow from remaining GTF compensation and a high‑double‑digit working‑capital build for the Fort Worth ramp‑up; order book stands at EUR 29.5 billion (≈3 years sold out).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.85
Very Positive
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.78
Positive
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.72
Positive
| 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
Positive
228.08
Price Trends
220.43
Positive
217.54
Positive
214.59
Positive
Market Momentum
4.19
Negative
61.18
Neutral
88.22
Negative
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 228.08 is above the 20-day moving average (MA) of 227.44, above the 50-day MA of 220.43, and above the 200-day MA of 214.59, indicating a bullish trend. The MACD of 4.19 indicates Negative momentum. The RSI at 61.18 is Neutral, neither overbought nor oversold. The STOCH value of 88.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MTUAY.
MTU Aero Engines Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $103.28B | 24.94 | 26.17% | 1.55% | -0.14% | 72.35% | |
75 Outperform | $66.17B | 41.66 | 8.20% | 1.61% | 2.83% | 47.00% | |
75 Outperform | $266.39B | 40.68 | 10.74% | 1.44% | 8.79% | 39.63% | |
73 Outperform | $23.51B | 27.20 | 23.85% | 0.59% | 46.08% | ― | |
70 Outperform | $362.51B | 41.69 | 45.24% | 0.48% | -19.21% | 31.83% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $183.29B | 123.10 | 289.00% | ― | 10.19% | -6.03% |
* Industrials Sector Average
MTUAY
MTU Aero Engines
218.46
57.02
35.32%
BA
Boeing
233.39
55.12
30.92%
GE
GE Aerospace
345.64
147.50
74.44%
LHX
L3Harris Technologies
354.27
153.30
76.28%
NOC
Northrop Grumman
727.73
276.04
61.11%
RTX
RTX
198.46
73.23
58.48%
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.