Street Calls of the Week
Investing.com - Jefferies has raised its price target on MTU Aero Engines (ETR:MTX) (OTC:MTUAY) to EUR500.00 from EUR470.00 while maintaining a Buy rating on the stock. The company, currently valued at $24.16 billion, has seen its shares surge over 35% in the past six months. According to InvestingPro analysis, the stock is trading near its Fair Value, with strong financial metrics supporting the positive outlook.
The price target increase follows what Jefferies described as a "stellar Q3" performance from the German aircraft engine manufacturer, despite a weak share price reaction due to market skepticism about the sustainability of the results. InvestingPro data reveals impressive revenue growth of 45.24% over the last twelve months, with the company maintaining a solid financial health score of "GOOD" - one of several key metrics available to Pro subscribers.
Jefferies believes the third-quarter performance indicates strong spare parts contribution, which the firm estimates has a 70% drop-through rate, and expects this strength to continue.
The research firm projects that the strong spare parts business will more than offset the progressive normalization in original equipment mix over the coming years.
Jefferies reinstated MTU Aero Engines as its "Civil Top Pick" following reassuring comments from the company regarding GTF (Geared Turbofan) aircraft on ground (AoG) issues going forward.
In other recent news, MTU Aero Engines has been the focus of several analyst evaluations. Deutsche Bank raised its price target for the company to €430.00, maintaining a Buy rating, following what it described as an impressive second-quarter performance. Meanwhile, UBS downgraded MTU Aero Engines from Buy to Neutral, citing concerns about the engine aftermarket cycle nearing its end, and adjusted its price target to €400.00 from €485.00. Despite this, UBS acknowledged the potential for a guidance upgrade in Commercial Spares growth later in the year.
Goldman Sachs also initiated coverage of MTU Aero Engines with a Neutral rating and a price target of €350.00. The bank highlighted the company’s high-margin business model and asset-light structure but noted that these attributes are already reflected in the current valuation. These developments indicate a mixed sentiment among analysts regarding the company’s future performance. Investors may find these insights useful as they navigate the evolving landscape of the aircraft engine industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.