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On Thursday, Deutsche Bank (ETR:DBKGn) increased its price target for MTU Aero Engines AG (MTX:GR) (OTC: OTC:MTUAY) to EUR 356 from EUR 337, while maintaining a Hold rating on the stock. The company’s shares are currently trading near their 52-week high of $202.77, having delivered an impressive 62% return over the past year. According to InvestingPro analysis, MTU appears to be trading above its Fair Value. The adjustment follows a series of meetings including CFO Peter Kameritsch and his successor Katja Garcia Vila during a roadshow in Frankfurt, as well as interactions with Investor Relations officer Claudia Heinle at the Deutsche Bank European Champions conference.
During these events, MTU Aero Engines outlined several key points of interest for investors. With a strong financial health rating and revenue growth of 44% in the last twelve months, the company is poised to announce its mid-term growth objectives at the upcoming Paris Air Show on June 17. InvestingPro subscribers can access 8 additional key insights about MTU’s financial performance and growth prospects. These targets will encompass various aspects of the business, including growth projections for different segments, expected earnings before interest and taxes (EBIT) margin, and cash conversion rates.
The analyst highlighted that MTU’s margin targets, particularly for the commercial original equipment manufacturer (OEM) segment, will be closely watched. While the OEM segment had previously hinted at a margin of over 25%, the current margin stands at an unsustainable 28%. The company maintains a healthy gross profit margin of 17.3% and has consistently paid dividends for 20 consecutive years, with dividend growth of 11.3% in the last year. The impact of service agreements for Leap and GEnX engines on MTU’s maintenance, repair, and overhaul (MRO) business will also be scrutinized.
Furthermore, foreign exchange (FX) rates and hedging strategies are anticipated to be significant topics of discussion, due to their notable influence on profitability, especially within the MRO segment. These financial strategies are crucial as they can greatly affect the company’s margin levels.
Investors and analysts alike are looking forward to the detailed presentation of MTU’s strategies and financial goals at the Paris Air Show, which is expected to provide a clearer picture of the company’s future trajectory and operational performance.
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