DCF Studio

    MTX.DE · GER · Industrials

    MTU Aero Engines AG

    Also onConsensus Drift

    Implied value per share

    EUR 360.58

    Market price

    EUR 339.90

    Implied upside

    +6.1%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    NoteRisk-free rate is an assumption: EUR assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    EUR 360.58+6.1%
    Exit multiple
    EUR 380.21+11.9%
    Market price
    EUR 339.90

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (EUR). Outflows negative.

    -145975196-729875980FY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayEUR
    LineFY26FY27FY28FY29FY30CAGR
    RevenueEUR 10.3bnEUR 12.2bnEUR 14.4bnEUR 17.0bnEUR 20.1bn+18.0%
    EBITEUR 801.2mEUR 945.6mEUR 1.1bnEUR 1.3bnEUR 1.6bn+18.0%
    NOPATEUR 576.2mEUR 680.1mEUR 802.7mEUR 947.3mEUR 1.1bn+18.0%
    Add depreciation & amortisationEUR 624.0mEUR 736.5mEUR 869.3mEUR 1.0bnEUR 1.2bn+18.0%
    Less capital expenditureEUR -758.7mEUR -895.5mEUR -1.1bnEUR -1.2bnEUR -1.5bn+18.0%
    Less increase in working capitalEUR -516.8mEUR -609.9mEUR -719.8mEUR -849.6mEUR -1.0bn+18.0%
    Free cashflow to firmEUR -75.2mEUR -88.8mEUR -104.8mEUR -123.7mEUR -146.0m-18.0%
    Discount factor0.96340.89430.83000.77050.7151-
    Present valueEUR -72.5mEUR -79.4mEUR -87.0mEUR -95.3mEUR -104.4m-9.6%
    Present Value Of The ForecastEUR -438.5m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate2.60%EUR assumption - no free live source available for this market (assumption)
    Equity risk premium6.00%Market assumption
    Beta0.930Reported 0.895, pulled toward 1.0 (Blume)
    Cost of equity8.18%Risk-free + beta x equity risk premium
    Cost of debt5.11%Interest expense / average total debt
    Market capitalisationEUR 18.3bn90.2% of capital
    Total debtEUR 2.0bn9.8% of capital, book value as a proxy
    Tax rate28.1%Effective, capped at statutory
    WACC7.74%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareEUR 360.58

    102% of EV

    Forecast FCFF, final year
    EUR -146.0m
    Capex at depreciation, working capital in reinvestment
    EUR 1.8bn
    Less reinvestment at g/ROIC (21.8% of NOPAT)
    EUR -397.1m
    Capitalised
    EUR 1.4bn
    ROIC (reported)
    11.5%
    Terminal value, undiscounted
    EUR 27.9bn
    Terminal value, discounted
    EUR 19.9bn
    Enterprise value
    EUR 19.5bn
    Less net debt
    EUR -362.0m
    Equity value
    EUR 19.9bn

    Exit at 10.6x EBITDA

    Value per shareEUR 380.21

    102% of EV

    Terminal value, undiscounted
    EUR 29.4bn
    Terminal value, discounted
    EUR 21.0bn
    Enterprise value
    EUR 20.6bn
    Less net debt
    EUR -362.0m
    Equity value
    EUR 21.0bn

    Spread between methods: 5%.

    Sensitivity

    Value per share (EUR) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.74%533.99578.08635.45713.39825.68
    6.74%413.88436.86465.01500.41546.42
    7.74%333.12345.74360.58378.33400.03
    8.74%275.34282.36290.34299.55310.33
    9.74%232.14235.92240.10244.75250.00

    Outlined: this model. Green text: above today's price of 339.90. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year18.0%16.3%-1.7pp
    EBIT margin7.7%7.2%-0.6pp
    Discount rate7.7%8.0%+0.3pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.