MTU Aero Engines reported Q4 revenue of €2.44 billion, surpassing consensus by 2%, driven by robust Commercial OEM and MRO performance. Adjusted EBIT hit €356 million (14.6% margin), 5% above estimates, though free cash flow (€99 million) lagged forecasts by 8%. Full-year sales reached €8.72 billion, slightly ahead of projections, while adjusted EBIT rose €1.35 billion. Net income and EPS, however, fell short of analyst expectations.

The firm guided 2026 revenue to €9.2-9.7 billion, aligning with market consensus at the midpoint. Adjusted EBIT guidance (€1.35-1.45 billion) sits 1% below consensus, with net income expected to grow in line. Analyst Chloe Lemarie of Jefferies noted the Q4 EBIT beat but flagged "soft" free cash flow, calling the 2026 outlook "solid at the top-end."

Cash conversion is projected at 45-55%, translating to €435-571 million in free cash flow—8% below consensus at the midpoint. Despite this, the commercial series business (engine modules) is forecast to grow mid-to-high teens organically, outpacing other segments. This resilience underscores MTU’s strategic focus on high-demand aerospace components amid industry volatility.

Investors weigh mixed signals: strong operational performance contrasts with cash flow pressures. The €9.2-9.7 billion 2026 revenue target suggests confidence in sustained demand, while the commercial series’ growth highlights a key differentiator. Whether MTU can bridge the cash flow gap remains critical to its near-term trajectory.