Moody
Equity Investor, Semiconductor Research
MTU Aero Engines gains from a new A220 order because the A220 is powered exclusively by Pratt & Whitney's PW1500G engine, in which MTU holds a 15% revenue share. The deal's lifetime value to MTU is estimated at about $1.8 billion, or roughly €680 million discounted at 8% over 12 years. MTU earns money on each engine sale, unlike Pratt & Whitney, which sometimes sells below cost. It is small against the massive backlog, but it still counts. x.com x.com
MTU Aero Engines' Q1 confirmed every key pillar of the long-term thesis, with the engine aftermarket wave clearly materializing. GTF work reached 44% of commercial MRO, defense grew 25%, and the order book rose 7% to €31.6B, about 3.6 years of revenue and still growing. Free cash flow rose 18% to €177M, a 77% cash conversion that makes the top of full-year guidance look achievable. The CFO saw no Iran impact in Q1, and the conflict is temporary turbulence on a long-haul investment. x.com x.com
RTX benefits from Pratt & Whitney's recovering jet-engine business alongside rising global defense budgets. In Q3 FY26, sales rose 11%, operating profit 32% with margins expanding, and net income to common 35%; basic EPS rose from $1.43 to $1.91. Grade A: RTX sits in the sweet spot as the world rearms and flies more. x.com
FTAI Aviation is one of the most mispriced names in the power trade after falling nearly 50% from its high. It owns the largest pool of 737 engines on earth; airlines cannot get new engines, so old ones fly longer, and with fuel up 70% airlines are dumping jets, letting FTAI buy engines cheap. It is converting those engines into data-center turbines for 2027 delivery, while GE and Siemens quote 2029, with a $1.465B order in hand. Three sold-out markets, one engine, under 10x next year's EBITDA. … Show more
RTX pairs solid fundamentals with near-term share pressure, backed by sustained defense demand, a cash-rich aftermarket and a fading GTF engine problem. Geopolitical tension drives demand for air defense, radars and munitions as procurement shifts to long-term replenishment. Delayed Boeing and Airbus deliveries keep older fleets flying, lifting high-margin repair work at Collins and Pratt & Whitney. GTF remediation is on track, with aircraft on ground down about 15% and repair output up 23%. … Show more
RTX's constraint has shifted from finding demand to building fast enough, as a commercial travel recovery and global rearmament land in one company. All three businesses expanded margins while orders outpaced shipments. Pratt & Whitney certified the GTF Advantage engine and sharply lifted PW1100 shop visits; Raytheon more than doubled first-half munitions output and won GEM-T awards; Collins' Sidekick software was picked for the Air Force's CCA program. Full-year guidance rose. x.com
GE Aerospace earns most of its money servicing a huge installed engine base, and record air traffic keeps that base turning. Engines sell at up to 70% off, while shop visits bring up to 70% of lifetime revenue; services were about 70% of 2025's $42B revenue, with a $210B backlog. At 43x earnings versus a 37x five-year average it is not cheap, a premium backed by the end of the conglomerate discount, margins and visibility. A correction would come only with a normal general market pullback. x.com … Show more
