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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on MTX

Negative drivers behind MTU Aero Engines AG's recent performance include the potential tariff hit to earnings, as warned by the company. Direct tariffs pose a headwind, according to Jefferies, which lowered its price target to EUR 400 from EUR 430. The company's Q1 results, although solid, were not enough to offset the impact of tariffs. Additionally, the group's guidance for earnings and free cash flow remains unchanged, despite better-than-expected Q1 figures.

1.c. Company Highlights

2. MTU Aero Engines AG Beats Expectations with Strong Q3 2025 Results

MTU Aero Engines AG reported a robust financial performance in Q3 2025, with group revenues surging 19% to nearly EUR 6.3 billion, in line with the company's full-year 2025 target. The adjusted EBIT rose over proportionately by 34% to EUR 995 million, resulting in a strong EBIT margin of 15.9%. Earnings per share (EPS) came out at EUR 10.31, significantly beating analyst estimates of EUR 4.02. The company's strong performance was driven by a favorable product mix in new engines and robust spare parts growth, with spare parts revenues growing at a mid- to high double-digit rate.

Publication Date: Oct -27

📋 Highlights
  • Strong Revenue Growth: Group revenues surged 19% to €6.3 billion, aligned with full-year targets.
  • Adjusted EBIT Expansion: Adjusted EBIT rose 34% to €995 million, achieving a 15.9% margin.
  • OEM Segment Outperformance: OEM adjusted EBIT jumped 44% to €640 million (31.1% margin), driven by new engines and spare parts.
  • MRO Revenue Growth: MRO revenues climbed 20% to €4.3 billion, led by narrowbody engines and MLS leasing.
  • Outlook Upgrade: Full-year EBIT guidance raised, with revenue expected between €8.6 billion–€8.8 billion at USD 1.13 exchange rate.

Revenue Growth Drivers

The company's OEM revenues rose by 15% to EUR 2 billion, with commercial OEM revenues growing 20% to EUR 1.6 billion. MRO revenues increased by 20% year-over-year to EUR 4.3 billion, driven by narrowbody engine programs, mature widebody platforms, and the MLS leasing and asset management business. Katja Garcia Vila noted that the company saw an elevated level of installed engines coming in during the quarter, along with a strong increase in spare parts business, contributing to revenue expansion and margin growth.

Margin Expansion and Outlook

The company's adjusted EBIT margin expanded to 15.9%, driven by a favorable product mix and robust spare parts growth. The company upgraded its EBIT adjusted guidance, highlighting the strong underlying business and its ability to generate highly attractive margins. The revenue outlook remains unchanged, with expected group sales between EUR 8.6 billion and EUR 8.8 billion based on an average U.S. dollar exchange rate of USD 1.13 per Euro.

Valuation Metrics

With a P/E Ratio of 23.13 and an EV/EBITDA of 15.18, the company's valuation appears to be reasonable, considering its strong growth prospects. Analysts estimate next year's revenue growth at 9.4%, which suggests that the company's growth momentum is likely to continue. The company's ROE of 25.37% and ROIC of 7.56% indicate a strong ability to generate returns on equity and invested capital.

3. NewsRoom

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MTU Aero Engines AG (ETR:MTX) Stock Has Shown Weakness Lately But Financials Look Strong: Should Prospective Shareholders Make The Leap?

Nov -25

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MTU Aero Engines (MTUAY) Forms 'Hammer Chart Pattern': Time for Bottom Fishing?

Nov -24

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Is Draganfly (DPRO) Stock Outpacing Its Aerospace Peers This Year?

Nov -21

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IAE international engine partnership marks key milestones and charts future propulsion path

Nov -13

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MTU Aero Engines AG Just Beat EPS By 50%: Here's What Analysts Think Will Happen Next

Oct -28

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MTU Aero Engines third-quarter profit beats forecasts, sending shares higher

Oct -23

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Is MTU Aero Engines AG (ETR:MTX) Trading At A 43% Discount?

Sep -01

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Is Howmet Aerospace (HWM) Outperforming Other Aerospace Stocks This Year?

Aug -22

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.75%)

6. Segments

Civil Engine Maintenance (Maintenance, Repair and Overhaul)

Expected Growth: 4.73%

MTU Aero Engines AG's 4.73% growth in Civil Engine Maintenance (MRO) is driven by increasing demand for air travel, rising aircraft utilization, and growing need for efficient engine maintenance. Additionally, the company's strong relationships with OEMs, expanding service network, and investments in digitalization and sustainability initiatives contribute to its growth momentum.

Civil and Military Engine Business (Original Equipment Manufacturing)

Expected Growth: 4.83%

MTU Aero Engines AG's 4.83% growth in Civil and Military Engine Business (OEM) is driven by increasing demand for fuel-efficient engines, rising global air travel, and growing military expenditures. Additionally, the company's strong partnerships with major OEMs, such as GE Aviation and Rolls-Royce, and its focus on research and development of new engine technologies also contribute to its growth.

7. Detailed Products

Commercial Engines

MTU Aero Engines AG designs and manufactures commercial aircraft engines, including the PW1100G-JM for the Airbus A320neo and the PW2000 for the Airbus A330.

Military Engines

MTU Aero Engines AG develops and produces military aircraft engines, such as the EJ200 for the Eurofighter Typhoon and the TP400 for the Airbus A400M.

MRO Services

MTU Aero Engines AG offers maintenance, repair, and overhaul (MRO) services for commercial and military aircraft engines.

Engine Components

MTU Aero Engines AG designs and manufactures engine components, such as turbine blades, vanes, and compressor blades.

Aero-derivative Gas Turbines

MTU Aero Engines AG develops and produces aero-derivative gas turbines for industrial power generation and oil and gas applications.

8. MTU Aero Engines AG's Porter Forces

Forces Ranking

Threat Of Substitutes

MTU Aero Engines AG faces moderate threat from substitutes, as customers have limited alternatives for aircraft engines. However, the company's strong brand reputation and high-quality products help mitigate this threat.

Bargaining Power Of Customers

MTU Aero Engines AG's customers, primarily aircraft manufacturers and airlines, have limited bargaining power due to the company's strong market position and high-quality products.

Bargaining Power Of Suppliers

MTU Aero Engines AG's suppliers, primarily raw material providers, have moderate bargaining power due to the company's dependence on high-quality materials. However, the company's strong relationships with suppliers help mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low for MTU Aero Engines AG, as the aircraft engine market is highly capital-intensive and requires significant expertise and resources to enter.

Intensity Of Rivalry

The aircraft engine market is highly competitive, with established players like General Electric and Rolls-Royce. MTU Aero Engines AG faces intense rivalry, which drives innovation and cost-cutting efforts.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.45%
Debt Cost 6.83%
Equity Weight 66.55%
Equity Cost 11.16%
WACC 9.71%
Leverage 50.26%

11. Quality Control: MTU Aero Engines AG passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Dassault Aviation

A-Score: 5.7/10

Value: 2.3

Growth: 6.0

Quality: 6.5

Yield: 5.0

Momentum: 9.0

Volatility: 5.3

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MTU Aero Engines

A-Score: 4.9/10

Value: 2.2

Growth: 6.1

Quality: 5.5

Yield: 1.2

Momentum: 8.5

Volatility: 6.0

1-Year Total Return ->

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Saab

A-Score: 4.4/10

Value: 0.6

Growth: 7.9

Quality: 5.6

Yield: 1.2

Momentum: 10.0

Volatility: 1.3

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Leonardo

A-Score: 4.4/10

Value: 1.7

Growth: 6.8

Quality: 4.0

Yield: 1.2

Momentum: 10.0

Volatility: 2.7

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QinetiQ

A-Score: 4.2/10

Value: 5.0

Growth: 4.4

Quality: 2.4

Yield: 2.5

Momentum: 7.5

Volatility: 3.7

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Elbit Systems

A-Score: 4.0/10

Value: 1.1

Growth: 6.2

Quality: 5.1

Yield: 1.9

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

354.7$

Current Price

354.7$

Potential

-0.00%

Expected Cash-Flows