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Investing.com -- MTU Aero Engines (ETR:MTXGn) was upgraded to “buy” from “hold” by Deutsche Bank (ETR:DBKGn), with the price target raised to €425 from €356.
The bank cited stronger-than-expected guidance through 2030, ongoing demand for the geared turbofan (GTF) program despite operational challenges, and newly provided medium-term targets that have improved visibility for investors.
Deutsche Bank said the outlook for 2030 has exceeded earlier projections, driven by airline strategies to extend the service life of their current fleets.
This trend is expected to boost investment in engine maintenance, repair and overhaul (MRO), as well as spare part procurement.
The extended use of aircraft is also leading to more intensive engine servicing, which could support aftermarket growth.
The brokerage added that previous caution around the GTF fleet management program now appears overstated.
Deutsche Bank had maintained a conservative stance due to persistent concerns around grounded aircraft.
However, the bank now expects the number of aircraft on the ground (AOG) to decline starting in late 2025.
Despite recent negative press surrounding the GTF, the brokerage noted that airlines have continued to place follow-on orders for the engine, citing activity at the Paris Air Show.
One key barrier to a more favorable long-term valuation had been the lack of medium-term financial guidance.
According to Deutsche Bank, that issue was addressed during the Paris Air Show, where MTU laid out targets through the second half of the decade.
The bank said the updated valuation now reflects a 2025–2030 outlook, with a trading multiple in line with French aerospace firm Safran (EPA:SAF), as the earlier discount no longer appears justified.