MTU Aero Engines Stock Is Down 18% This Year. Here’s Why One Analyst Says Buy the Dip

The recent sell-off in MTU Aero Engines (ETR: MTX) shares has created a buying opportunity rather than a reason for concern, according to mwb Research, which reiterated its Buy rating and €520 price target on the German aerospace company.

MTU shares closed down 3.7% Friday and are off 18.1% year to date and 11.1% over the past week, with the decline driven by market concerns over a softer aftermarket cycle.

But mwb Research analyst Jens-Peter Rieck argues in a note that the implied downside scenario is “too pessimistic.”

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“Even if 2026 normalizes somewhat, the year represents less than 2% of our price target and should not drive the investment case,” Rieck wrote.

He pointed to past shocks as precedent, noting that during COVID-19, MTU fell from €290 to €100 before recovering roughly 80% within six months. The war in Ukraine triggered a milder drop of around 30%, followed by a roughly 50% rebound within three months.

Central to mwb Research’s view is that a bearish scenario requires a structural halt in global air travel, something the firm flatly rejects.

“A bear case requires planes to stop flying,” Rieck wrote, calling the core assumption behind the selloff “fundamentally flawed.”

The firm sees MTU’s long-term earnings drivers, including a growing installed base, rising flight hours and more than a decade of commercial OEM backlog, as fully intact.

A multiples-based analysis, mwb Research noted, points to a fair value above €600, which it views as realistic once near-term uncertainty fades.

“Within the sector, MTU remains one of the best-positioned assets in our view,” stated Rieck. “The recent share price weakness further increases the disconnect between fundamentals and valuation. The market is pricing a scenario that is too pessimistic relative to realistic downside cases.”