BUZZ-MTU Aero: UBS downgrades, sees better value in Rolls-Royce

** UBS (NYSEArca: FBGX - news) sees earnings quality at MTU Aero Engines declining and says it sees better value in Rolls-Royce

** "We believe that most of the near term profit growth is driven by FX tailwinds and increasing capitalisation of R&D," UBS analysts say in a note

** Downgrades MTU to "sell" from "neutral", cuts price target to 82 vs 83 eur

** Shares (Berlin: DI6.BE - news) in MTU fall 2 pct to the bottom of the MDAX index in early trade, reaching their lowest level in almost two months

** UBS analysts also say they are not convinced that low oil prices will yield a material upgrade to aftermarket growth

** Say MTU's historical peak valuation of 16.5x P/E and EV/EBITA at 13.6x 2016 estimates, at a premium to Safran (Paris: FR0000073272 - news) on 13x and Rolls-Royce on 11.6x, makes Rolls-Royce a better value with 15 pct upside (RM (LSE: RM.L - news) : maria.sheahan.thomsonreuters.com@reuters.net)