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MTU Aero Engines
(OTC:MTUAY)
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Rating:74Outperform
Price Target:
$227.00
▲(16.46% Upside)
Action:Reiterated
Date:07/31/26
MTUAY’s score is driven primarily by improving financial performance (higher margins, earnings, and sharply better free cash flow) and a positive earnings-call update (guidance reaffirmed and cash-conversion guidance raised). Technicals add support with the stock trading above key moving averages. Valuation is moderate (P/E ~17.7) with a modest dividend yield (~1.05%). The main offsets are historical earnings/FCF volatility and ongoing GTF-related cash and operational headwinds.
Positive Factors
Margin expansion / Profitability
Sustained margin improvement in 2025 reflects stronger pricing, mix and operational leverage across OEM and aftermarket. Higher gross and net margins increase durable cash earnings, improving ability to fund R&D, ramp capacity and withstand cyclical OEM revenue swings over the medium term.
Negative Factors
Earnings and FCF volatility
Pronounced year-to-year swings in profitability and free cash flow signal execution and cycle sensitivity. Such volatility complicates forecasting, can strain stakeholder confidence and makes long-term planning for capital allocation, payout policy and program financing more challenging.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin expansion / Profitability
Sustained margin improvement in 2025 reflects stronger pricing, mix and operational leverage across OEM and aftermarket. Higher gross and net margins increase durable cash earnings, improving ability to fund R&D, ramp capacity and withstand cyclical OEM revenue swings over the medium term.
Read all positive factors
MTU Aero Engines (MTUAY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$22.48B
Dividend Yield1.02%
Average Volume (3M)3.50K
Price to Earnings (P/E)20.7
Beta (1Y)0.88
Revenue Growth20.48%
EPS Growth18.43%
CountryUS
Employees13,674
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)8.81
Shares Outstanding107,818,320
10 Day Avg. Volume5,474
30 Day Avg. Volume3,504
Financial Highlights & Ratios
PEG Ratio0.36
Price to Book (P/B)4.48
Price to Sales (P/S)2.29
P/FCF Ratio39.86
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
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 Description
MTU Aero Engines AG, along with its various subsidiaries, is a global aerospace company focused on the complete lifecycle of aircraft propulsion systems and industrial gas turbines. Its extensive operations encompass development, manufacturing, ma...
How the Company Makes Money
MTU Aero Engines makes money mainly through two complementary businesses: original equipment (OE) participation in new engine programs and aftermarket services for engines in operation.
1) Original equipment (new engines, modules, and components)...
MTU Aero Engines Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive operational and financial picture: solid revenue and EBIT growth, very strong free cash flow and cash conversion, significant MRO momentum (notably GTF MRO), a large order book and strategic technology initiatives. Lowlights centered on commercial OEM revenue declines (driven by tough comps and FX), ongoing GTF-related cash and operational impacts (AOG compensation, pre-financed receivables), ramp-up costs at new facilities and geopolitical/program timing risks. Overall the positives (growth, margins, cash, order book, progress on GTF recovery and strategic moves) substantially outweigh the remaining operational and timing headwinds.Positive Updates
Strong Revenue Growth
Group revenues increased 13% year-on-year to ~EUR 4.7bn (21% growth in USD terms), driven by commercial MRO and military businesses.
Negative Updates
Commercial OEM Revenue Decline
Total OEM revenues in EUR declined 8% in Q2 and commercial OEM revenues were down 11% in Q2 (commercial OEM down 9% in H1), largely due to an exceptionally strong prior-year comparison, FX/hedging effects and normalization of spare engine mix/pricing.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth
Group revenues increased 13% year-on-year to ~EUR 4.7bn (21% growth in USD terms), driven by commercial MRO and military businesses.
Read all positive updates
Company Guidance
Management reaffirmed its 2026 revenue and adjusted‑EBIT guidance while raising the full‑year cash‑conversion guidance to 50–60% (from 45–55%), noting H1 free cash flow of EUR 294m (+39% y/y) and a H1 cash conversion of 59% (Q2 FCF EUR 117m, +91% y/y; Q2 cash conversion 43%); all other guidance parameters remain unchanged. They reiterated the mid‑term targets of OEM margins of 28–30% and a cash conversion ambition of 75–99% by 2030, confirmed they are fully hedged for 2026 at an average USD/EUR rate of 1.14 and that the JV with Airbus (fuel‑cell propulsion) is expected to start operations beginning 2027 (subject to approvals). Key operational and program metrics underpinning the outlook include group H1 revenues ~EUR 4.7bn (+13%), adjusted EBIT EUR 692m (+5%, margin 14.8%), OEM H1 margin ~31.2% (Q2 OEM margin 32%), commercial MRO Q2 revenues up 37% to EUR 1.5bn (H1 MRO ~EUR 3.4bn, +21%; GTF MRO ≈46% of MRO revenues; MRO H1 adjusted EBIT EUR 271m, margin 8%), an order book of EUR 30.4bn, USD 4.9bn of H1 MRO contract wins plus ~USD 500m Farnborough commitments, and an expected resolution of powder‑metal related GTF AOGs by end‑2026 (GTF AOG compensation ~USD 110m in H1, ~USD 50m in Q2).MTU Aero Engines Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 9.29B | 8.42B | 7.41B | 5.36B | 5.33B | 4.19B |
| Gross Profit | 1.69B | 1.69B | 1.23B | 117.00M | 855.00M | 586.00M |
| EBITDA | 1.54B | 1.60B | 1.47B | 196.00M | 723.00M | 519.00M |
| Net Income | 950.72M | 1.02B | 633.00M | -102.00M | 331.00M | 222.00M |
Balance Sheet | ||||||
| Total Assets | 13.35B | 13.22B | 12.48B | 10.20B | 9.23B | 8.30B |
| Cash, Cash Equivalents and Short-Term Investments | 2.54B | 2.36B | 2.60B | 1.54B | 1.21B | 885.00M |
| Total Debt | 2.15B | 2.43B | 2.43B | 1.27B | 1.30B | 1.31B |
| Total Liabilities | 8.75B | 8.84B | 9.05B | 7.27B | 6.12B | 5.54B |
| Stockholders Equity | 4.54B | 4.31B | 3.36B | 2.86B | 3.03B | 2.68B |
Cash Flow | ||||||
| Free Cash Flow | 673.63M | 484.11M | 74.00M | 365.00M | 326.00M | 200.00M |
| Operating Cash Flow | 1.05B | 814.53M | 714.00M | 777.00M | 728.00M | 567.00M |
| Investing Cash Flow | -578.06M | -465.86M | -603.00M | -420.00M | -400.00M | -345.00M |
| Financing Cash Flow | -483.27M | -804.93M | 736.00M | -294.00M | -224.00M | -276.00M |
MTU Aero Engines Technical Analysis
Positive
194.92
Price Trends
191.99
Positive
186.00
Positive
199.92
Positive
Market Momentum
2.38
Negative
62.00
Neutral
97.00
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 194.92 is below the 20-day moving average (MA) of 201.00, above the 50-day MA of 191.99, and below the 200-day MA of 199.92, indicating a bullish trend. The MACD of 2.38 indicates Negative momentum. The RSI at 62.00 is Neutral, neither overbought nor oversold. The STOCH value of 97.00 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $290.06B | 37.43 | 11.79% | 1.30% | 11.84% | 24.93% | |
74 Outperform | $22.48B | 20.66 | 24.91% | 1.09% | 20.48% | 18.43% | |
74 Outperform | $373.60B | 42.26 | 49.03% | 0.47% | 21.69% | 18.42% | |
70 Outperform | $77.07B | 17.20 | 26.58% | 1.73% | 5.90% | 16.00% | |
68 Neutral | $51.59B | 27.82 | 9.52% | 1.63% | 7.29% | 10.75% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
49 Neutral | $170.83B | 80.95 | 105.39% | ― | 24.78% | ― |
* Industrials Sector Average
MTUAY
MTU Aero Engines
208.13
-9.88
-4.53%
BA
Boeing
216.14
-6.20
-2.79%
GE
GE Aerospace
360.07
85.24
31.01%
LHX
L3Harris Technologies
277.06
3.44
1.26%
NOC
Northrop Grumman
542.48
-38.17
-6.57%
RTX
RTX
215.22
60.31
38.93%
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.