MTU shares: Solid forecast after red figures

Last Updated: 29. Februar 2024By

MTU stock has temporarily dropped after the presentation of the 2023 financial results and the outlook for 2024. During the morning trading, the stock fluctuated and continued to trade just below the 220 euro mark (as of February 29, 2024, approximately 11:30 am).

In the past year, the engine manufacturer has had to report a loss for the first time in its 90-year history. The recall of engines from Pratt & Whitney has caused additional costs of around 1 billion euros for MTU. However, for investors, the most important thing is: The outlook for the current year 2024 is positive.

MTU with mixed business figures Aside from the negative one-time effects, the 2023 fiscal year was overall very positive: The engine manufacturer listed on the DAX achieved a consolidated revenue of over 6.3 billion euros and thus met its own forecast while being 19 percent above the previous year’s value.

The adjusted EBIT was also in line with expectations at 818 million euros and even 25 percent above the previous year โ€“ the adjusted EBIT margin was 12.9 percent. However, the one-time costs of 1 billion euros spoiled the result: In the end, there was a loss of 97 million euros in the books โ€“ for the first time in its 90-year history, MTU ended a fiscal year in the red.

Positive: In 2024, the engine manufacturer from Munich plans to continue to grow. Revenue is expected to reach between 7.3 and 7.5 billion euros, which is at least 15 percent above the adjusted revenues from 2023. At the same time, MTU plans to achieve an EBIT margin of „more than 12 percent“. For 2025, the goal remains โ‚ฌ8 billion in revenue and โ‚ฌ1 billion in adjusted EBIT.

MTU stock: Opportunities after recall problems The shock of the additional 1 billion euros in costs from the engine recall action was deep, and within a short time, MTU’s stock had lost 25 percent in September. This loss has since been compensated, and the stock is now trading at around the same level as last summer.

With a positive outlook for 2024 and ambitious growth plans for the next two years, MTU stock still has potential. Not all analysts are optimistic about the DAX stock, but some see significantly higher prices for MTU. For example, Jefferies has confirmed a target price of โ‚ฌ280 for MTU stock following the financial results.