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Today we're going to take a look at the well-established MTU Aero Engines AG (ETR:MTX). The company's stock saw a significant share price rise of 28% in the past couple of months on the XTRA. The company is now trading at yearly-high levels following the recent surge in its share price. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on MTU Aero Engines’s outlook and valuation to see if the opportunity still exists.
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Is MTU Aero Engines Still Cheap?
Good news, investors! MTU Aero Engines is still a bargain right now. According to our valuation, the intrinsic value for the stock is €498.62, but it is currently trading at €344 on the share market, meaning that there is still an opportunity to buy now. However, given that MTU Aero Engines’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
See our latest analysis for MTU Aero Engines
What kind of growth will MTU Aero Engines generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. MTU Aero Engines' earnings over the next few years are expected to increase by 44%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? Since MTX is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on MTX for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MTX. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.