MTU Aero Growth Boosted by Spare Parts and Military Sales

Wide-moat MTU Aero’s first-quarter 2022 results are in line with expectations. Sales and EBIT growth of 19% and 52% respectively, reflect the recovery in air traffic and low comparable base in the prior year. The standout performers were the maintenance, repair, and overhaul, or MRO, and military businesses, both posting sales growth higher than 20%. Management reiterated 2022 midpoint sales of EUR 5.3 billion and EBIT growth in the mid-20s. We maintain our EUR 200 fair value estimate, with shares trading in fair value territory.