MTU Aero Engines AG

MTU Aero Engines' stock has completed a full boom‑bust‑repair cycle over the last five years, now trading at 402 as of February 22, 2026—a price that reflects a normalized growth narrative with a lingering GTF overhang.

2019–early 2020: Late‑cycle peak and COVID shock

Into early 2020, MTU traded as a high‑quality aero‑cycle play, leveraged to commercial OE and aftermarket growth, with solid double‑digit revenue expansion and rising EBIT through 2018–2019.

COVID‑19's arrival in Q1 2020 triggered a sharp drawdown. Global air traffic collapsed, and investors recalibrated for a multi‑year hit to engine deliveries and shop visits. The stock moved from a late‑cycle peak into severe de‑rating.

The story shifted: from "premium aero growth compounder" to "cyclical victim of an unprecedented air‑traffic collapse," with focus moving to liquidity, order book resilience, and aftermarket sensitivity.

On the chart: A violent downtrend from pre‑COVID highs into March 2020, with classic capitulation and extreme volatility. After the initial crash, the stock entered a volatile bottoming range as investors assessed how long the pandemic would weigh on civil aviation.

2020–2021: Recovery and reopening

Through late 2020 and into 2021, revenues stabilized and then grew as air traffic and maintenance activity gradually recovered. 2021 net sales and EBIT both rebounded versus 2020, with sequential improvement visible quarter by quarter.

The narrative: MTU became a "reopening recovery" and "aftermarket leverage" play—a way to bet on normalized flight activity and shop visits, though still framed as cyclical rather than structural growth.

On the chart: A strong uptrend off the 2020 lows into 2021 as vaccine progress and traffic recovery took hold. Periods of consolidation followed each leg higher, creating a recovery channel rather than a straight line.

2022: Normalization and margin rebuilding

MTU delivered solid top‑line growth—net sales above €5.3 billion with nearly 27% year‑on‑year increase—and improving EBIT, reflecting normalized demand and solid execution across OEM and MRO segments. Management's outlook pointed to continued revenue growth into 2023 and 2024, signaling that the COVID trough was behind the company and profitability could keep rebuilding.

The perception: Shifted toward "quality aero compounder in recovery," with investors focusing on margin recovery, strong civil aftermarket demand, and MTU's exposure to high‑bypass geared turbofan programs rather than balance‑sheet risk.

On the chart: A broad sideways‑to‑up range, as earlier recovery gains were digested while new highs faced headwinds from macro concerns—inflation, rising rates, war‑related uncertainty—that weighed on European cyclicals. Several breakout attempts likely failed as sentiment alternated between optimism and caution.

2023: GTF powder‑metal crisis and earnings hit

Pratt & Whitney's geared turbofan powder‑metal issue escalated in 2023, requiring extensive inspections and grounding hundreds of A320neo‑family aircraft. MTU, as a key GTF partner, booked "enormous" exceptional charges tied to the fleet management plan announced in September 2023. The result: negative reported earnings for the first time in roughly 90 years of history, despite strong revenue growth.

The narrative flipped: from "clean aero recovery" to "solid execution, but GTF‑overhang story." Many saw this as a good underlying franchise temporarily impaired by external engine‑program liabilities and cash‑flow uncertainty.

On the chart: A sharp downtrend followed the September 2023 disclosure, with a large gap‑down typical of major program‑risk events. The stock then tried to stabilize in a lower range as the market worked to quantify ultimate costs, grounding duration, and cash profile of GTF remediation.

2024–early 2026: Powering through, price at 402

2024 results showed that while GTF issues imposed a heavy financial burden, underlying operations remained solid with continued revenue growth and EBIT improvement. Management guided for further top‑line expansion into 2025 and 2026.

By 2024–2025, sector and specialist analyses increasingly framed MTU as a resilient aftermarket leader "powering through turbulence," with growth driven by civil MRO and long‑term engine program exposure, even as GTF inspections and repairs stretch into at least 2026.

The story evolved: toward a "re‑rating candidate with a known overhang"—not a pure hype growth stock, but a defensive aero compounder where investors focus on normalized earnings power and cash flows after GTF remediation, weighing the risk of further provisions against durable aftermarket demand.

On the chart: After the 2023 step‑down, 2024 showed a base‑building phase with an initial bottom, multiple retests, and then a gradual uptrend as clarity on provisions and long‑term guidance improved. Into 2025 and up to the current price of 402, the stock moved into a constructive uptrend with periodic consolidations, reflecting growing confidence in MTU's growth outlook while still pricing in a residual GTF discount.