CIti double-upgrades MTU to 'buy' on improving cash generation

By Reuters News

** Citi upgrades Germany's MTU Aero Engines MTXGn.DE to "buy" from "sell", saying growth in its service business should boost cash generation

** The broker says the aircraft engine maker's outlook is improving as its engine servicing business grows and GTF engine issues ease

** It expects cash conversion to rise from about 55% in 2026 to 80% to 90% by 2030

** Citi also forecasts EBIT growth of about 8.5% annually over 2026 to 2031

** The broker says improving cash generation could help narrow MTU's valuation discount to peer Safran SAF.PA

** It raises its PT to €445, implying about 25% upside

** Shares in MTU are seen up 2.6% in pre-market trade

** Out of 23 analysts that cover MTU Aero Engines AG, 14 rate the stock "strong buy" or "buy,"​ six rate "hold" and three​ rate the stock "strong sell" or "sell" -- LSEG data

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.