Buy Signal on MTU Aero Engines (MTX-DE)
MTU is a €11 Bn market cap and is one of the world leaders in manufacturing and marketing of modules and components for civil and military aviation engines. The group also offers engine maintenance, repair, and overhaul services. Revenues are split into 2 segments : 1/ sale of modules and components for commercial and military aviation engines (58%). The group also offers maintenance, repair, and overhaul services for military engines; 2/maintenance, repair, and overhaul services for commercial engines and industrial gas turbines (42%).
The company has been deeply impacted by the health crisis, but is expected to recover from 2021 with Commercial maintenance which should show the strongest upward trend, with revenue growth in the twenty percent range. Key drivers here are the MTU strong position in engines for narrowbody aircraft and its large customer base in the cargo sector. The commercial spare parts business should post slightly higher revenue in 2021. commercial series business will make a stable contribution to revenue in 2021 as the lower output of aircraft is reflected in engine production.
Short term catalyst: End of the health crisis, maintenance & spare parts.
This signal looks consistent with the Major Bullish Trend in the European Tourism sector.