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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

MTU Aero Engines' recent performance was driven by robust financial results, with record revenue and significant growth. The company's Q4 earnings call highlighted strong commercial demand, progress on the geared turbofan (GTF) fleet management plan, and investments to expand maintenance, repair, and overhaul (MRO) capacity. A $705m market cap gain rewarded institutional investors, who hold a large stake in the company. With a 20.33% total shareholder return over the past year, MTU Aero Engines expects commercial business to boost 2026 revenue, particularly in its commercial series business.

1.c. Company Highlights

2. MTU Aero Engines' Strong 2025 Performance Sets Stage for Continued Growth

MTU Aero Engines delivered a stellar performance in 2025, with revenue reaching EUR 8.7 billion, EBIT increasing to EUR 1.35 billion, and a margin of 15.5%. The company's adjusted net income grew 27% to EUR 968 million, and free cash flow rose to EUR 378 million, a new all-time high. Earnings per share (EPS) came in at EUR 10.31, significantly beating analyst estimates of EUR 4.02. As Katja Vila, Chief Financial Officer, noted, "We achieved our several times upgraded guidance in all financial KPIs in 2025."

Publication Date: Feb -25

📋 Highlights
  • Record Revenue & EBIT:: Revenue reached EUR 8.7 billion, EBIT rose to EUR 1.35 billion (15.5% margin), and free cash flow hit EUR 378 million in 2025.
  • Strong Order Book:: Current order book stands at USD 29.5 billion, covering 3 years of capacity, with USD 2+ billion in new OEM orders driven by GTF/GENX/GE9X programs.
  • GTF MRO Dominance:: GTF MRO contributed 40% of total MRO revenues in 2025, with adjusted EBIT up 9% to EUR 478 million (8% margin).
  • 2026 Guidance:: Adjusted EBIT projected between EUR 1.35–1.45 billion; MRO growth expected in low-to-mid teens, with 40–45% revenue share from GTF MRO.
  • Debt & Hedging:: Net debt reduced to EUR 1.1 billion (net debt/EBITDA <1x), and 80% of 2026 USD exposure hedged at 1.13 EUR/USD rate.

Revenue Growth Drivers

The company's commercial OEM business remained exceptionally strong, with new orders exceeding USD 2 billion in 2025, driven by the GTF, GENX, and GE9X programs. The MRO segment also performed well, with commercial revenues rising by 18% to EUR 5.96 billion in 2025, driven by the GTF program. For 2026, MTU expects organic U.S. dollar OE revenues to grow in the mid- to high-teens range, driven by increased engine deliveries and a higher share of installed engines.

Valuation Metrics

With a P/E Ratio of 22.59 and an EV/EBITDA ratio of 14.84, the market appears to be pricing in a certain level of growth for MTU Aero Engines. The company's ROE of 25.37% and ROIC of 7.56% indicate a strong ability to generate returns on equity and invested capital. The dividend yield of 0.58% is relatively modest, but the company's commitment to returning value to shareholders is evident in its proposed dividend of EUR 3.60 per share for 2025.

Outlook and Challenges

While MTU Aero Engines is well-positioned for continued growth, there are potential headwinds on the horizon. The ramp-up of the Fort Worth facility is expected to have a high double-digit impact on free cash flow, and the company anticipates an increase in GTF receivables for prefinance shop visits, which will be a headwind for free cash flow. Additionally, the company's inventory levels are expected to continue growing due to business expansion, despite efforts to manage them efficiently.

Guidance and Expectations

For 2026, MTU expects to deliver a strong performance, with adjusted EBIT expected to come in between EUR 1.35 billion and EUR 1.45 billion. The company's guidance is fully aligned with its growth plan towards its midterm target for 2030. Analysts estimate revenue growth of 10.1% for the next year, which is slightly below the company's expected growth rate. Overall, MTU Aero Engines' strong 2025 performance and positive outlook make a compelling case for continued growth and investment in the company.

3. NewsRoom

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Evaluating MTU Aero Engines (XTRA:MTX) Valuation After Recent Share Price Moves

Feb -26

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MTU Aero Engines AG (MTUAF) Full Year 2025 Earnings Call Highlights: Record Revenue and ...

Feb -24

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MTU Aero Engines Shares Fall After Outlook Narrowly Misses Expectations

Feb -24

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MTU Aero Engines Q4 Earnings Call Highlights

Feb -24

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MTU Aero Engines Expects Commercial Business to Boost 2026 Revenue

Feb -24

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Is Astronics (ATRO) Stock Outpacing Its Aerospace Peers This Year?

Feb -16

Source: zacks.com

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Are Investors Undervaluing MTU Aero Engines AG (ETR:MTX) By 35%?

Feb -09

Source:

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Commercial Aircraft Gas Turbine Engines Market Report 2026-2030 Featuring Profiles of GE Aviation, Honeywell, MTU Aero Engines, Raytheon Technologies Corp., Rolls-Royce and Other Key Players

Jan -26

Source:

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: 2.2

Growth: 6.0

Quality: 6.6

Yield: 5.0

Momentum: 9.0

Volatility: 5.3

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MTU Aero Engines

A-Score: 4.6/10

Value: 2.4

Growth: 6.1

Quality: 5.6

Yield: 1.2

Momentum: 6.0

Volatility: 6.3

1-Year Total Return ->

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Leonardo

A-Score: 4.4/10

Value: 1.9

Growth: 6.8

Quality: 4.0

Yield: 1.2

Momentum: 10.0

Volatility: 2.3

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QinetiQ

A-Score: 4.0/10

Value: 5.2

Growth: 4.4

Quality: 1.9

Yield: 3.1

Momentum: 5.5

Volatility: 3.7

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Elbit Systems

A-Score: 3.9/10

Value: 0.8

Growth: 6.2

Quality: 5.2

Yield: 1.2

Momentum: 5.0

Volatility: 4.7

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Saab

A-Score: 3.7/10

Value: 0.6

Growth: 7.9

Quality: 5.0

Yield: 1.9

Momentum: 5.0

Volatility: 1.7

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

347.4$

Current Price

347.4$

Potential

-0.00%

Expected Cash-Flows