Not every Dax value has to be in focus;

like VW with the diesel scandal, Bayer with Monsanto lawsuits in an endless loop, Adidas with communication breakdowns in the first Corona weeks or Delivery Hero as the new digital figurehead in the upper house of the stock exchange that has not yet made a euro cent profit.

It's the same for MTU, the Munich-based manufacturer of components for aircraft engines with little esprit and charisma.

In doing so, he develops high technology of the finest quality, which has demanding topics such as environmentally friendly and economical nozzles or alternative drive systems as major future topics.

There is not much fuss outside.

One remains inconspicuous.

Perhaps knowing that MTU products have less charm than those from BMW or Adidas?

Rudiger Koehn

Business correspondent based in Munich.

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This is also not the business of CEO Reiner Winkler, who quietly, calmly and conservatively points investors and analysts into the future. He seldom succeeds in delighting the markets. A bright moment was two years ago: Surprisingly, he became the head of a group that had moved from the M-Dax to the Dax, which accelerated the breathtaking price increase until the beginning of 2020. The fact that MTU is replacing the traditional Dax founder ThyssenKrupp was thanks to political support. Because the germinated discussion about the rental price brake dealt the share of the actual promotion favorite Deutsche Wohnen a heavy blow, which suddenly no longer fulfilled the DAX criteria.

Initially, the Munich newcomer to the top segment of the stock exchange had to struggle to secure permanent membership.

But further price gains have made the group, valued at 11 billion euros today, a firm component with broad free float, and with the Dax family expanded to 40 members, it belongs even more to the establishment.

One of the big losers on the stock market

The tactic of inconspicuousness and restraint takes effect. Or investors and analysts are now simply satisfied with the procedure, as has now been shown with the announcement of the half-year results. All in all, they were well received, the numbers were slightly better than expected. MTU boss Winkler made the outlook more precise by means of minimal fine-tuning: Group sales are expected to rise to 4.3 to 4.5 billion euros this year (2020: 4 billion euros); previously 4.2 to 4.6 billion euros had been communicated. The adjusted operating return on sales, based on earnings before interest and taxes (EBIT), should now be 10.0 to 10.5 (2020: 10.5) percent in the upper half of the previously mentioned range of 9.5 to 10, 5 percent lie.

There was no positive price reaction at the end of last week due to an overall weak stock market. But the good mood was also limited at the beginning of the week - even if the message got through that the second half of the year will show further improvement after the second quarter. Nevertheless: The pre-crisis level will not be reached by a long way in earning power, but at least the turnover will. In 2019, the EBIT reached 757 million euros, in 2021 it will at best reach 480 million euros.

In view of the aviation crisis, MTU was one of the big losers on the stock exchange last year.

After the slump as a result of the standstill of business and tourism traffic, there were repeated tendencies towards recovery.

In November the share reached a new plateau.

The erratic fluctuations, however, reflect the ups and downs in the industry with openings, partial openings and new lockdowns.

As an important supplier to aircraft manufacturer Airbus, similar price developments with their shares are no coincidence.

Need more persuasiveness

More engines and spare parts are being sold again, while airlines are still holding back on the much more profitable maintenance and service business. That still depresses the margin. As a consortium partner of the engine manufacturers General Electric and Pratt & Whitney, Airbus is the main customer and less strong in business with its American rival Boeing. The Airbus medium-haul aircraft in the A320neo family is in comparatively high demand despite the crisis. After production cuts, production is to be cautiously ramped up again. Propulsion systems for the 777 and 787 Dreamliner wide-body aircraft are produced for Boeing. But the level is not only low because of the Corona crisis. Deliveries of finished Dreamliners to the airlines are delayed due to quality problems.Therefore, the people of Munich have to wait for the payments.

That doesn't prevent analysts from remaining optimistic on the whole. Much is already taken into account in the share price of around 207 euros, it is said almost in unison. Wolfgang Donie from Nord LB raises the price target from 210 to 225 euros and advises holding the title. This is also how the private bank Berenberg sees it. Andrew Gollan is waiting for more potential to be seen in air traffic. UBS leaves its judgment at "neutral" as well as the target price of 215 euros. The US bank JP Morgan also remains neutral, but raises the price expectation from 191 to 225 euros. The British investment bank Barclays sees 218 euros. The US investment bank Goldman Sachs is also “neutral”, but remains well below the current mark at 181 euros. Christian Cohrs from Warburg Research does not seem to be very convinced:He has raised the target from 160 to 177 euros, but advises selling. In order to convince such skeptical analysts, MTU boss Winkler would have to do research.

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