MTU Aero Engines Stock Seen as Undervalued, Analyst Argues Selloff a ‘Rare Entry Point’

MTU Aero Engines AG (ETR: MTX) is trading at a valuation that “looks excessive” relative to its fundamentals, according to new analysis from mwb Research, which reiterated a Buy rating and a EUR 505 price target.

The firm’s analyst, Jens-Peter Rieck, stated in a note that the recent selloff, which has pushed the stock 21% below its February all-time high, represents “an attractive entry opportunity rather than a sign of weaker fundamentals.”

mwb Research argued that the company continues to execute effectively, noting that the FY25 adjusted EBIT margin is already at 15.5%, “in line with management’s 2030 target.”

Despite that delivery, the shares trade at “only 8.5x 2027 EV/EBITDA and 14.8x 2027 P/E, around half peer median levels,” a discount the firm said is far too wide given MTU’s long-term visibility and operational progress.

The analyst said current consensus remains “too conservative, especially on margins,” and that its own modelling implies a value “of more than EUR 600/share” if MTU were to trade at average peer multiples.

The EUR 505 target price reflects what mwb Research sees as a substantial rerating opportunity, with a potentially significant upside from the current EUR 306.50 share price.

Operationally, mwb Research highlighted steady progress in commercial MRO, a constructive margin trajectory, and strong visibility supported by a backlog exceeding 10 years.

“MTU’s discount versus peers has widened to a level that looks excessive and unsupported by either operations or fundamentals,” the analysts wrote, adding that the company is “clearly on track to at least reach its 2030 ambitions.”

The firm concluded that continued delivery should “support further upside as MTU continues to deliver.”