Buy Signal on MTU Aero Engines (MTX-DE)

Our System triggered an Enter Long Strategic signal on February 28, 2022 on MTU Aero Engines AG, MTX-DE, the German Aerospace & Defense Company.

Our system also triggered a Tactical Buy signal on February 11, 2022, that suggest a bullish acceleration. MTU has a reasonnable track record with a behavorial score of 5/10, therefore we consider the signal as mainly Long term.

MTU Aero Engines is a € 11.2 Bn market cap, and 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 achieved mainly with maintenance, repair, and overhaul services for commercial engines and industrial gas turbines (62%); and also sale of modules and components for commercial and military aviation engines (38%). The group also offers maintenance, repair, and overhaul services for military engines.

In 2022, MTU Aero Engines is expected to post revenues of € 5.18 Bn (+20.7% y/y) coupled with a 11.6% operating margin (+40 bp y/y). EPS are expected by more than 20% in the the next two years.

In the wake of the Russia invasion of Ukrain, the german gouvernment just stated it intends to increase its military spending dramatically to above 2% of german GDP, to €100 bn. A move that will benefits MTU Aero Engines.

Short term catalyst : Germany to increase military spending dramatically, reopening.

This signal looks consistent with the European Aerospace & Defense sector in major bullish trend, while there is only 62% of stocks in bullish tactical signal and 38% in bullish strategic signal within the European Aerospace & Defense sector.