Embraer SA (ERJ) AI Stock Analysis

• Market Cap: $8.80B
• Dividend Yield: 0.41%
• Average Volume (3M): 1.12M
• Price to Earnings (P/E): 22.3
• Beta (1Y): 1.01
• Revenue Growth: 22.29%
• EPS Growth: 51.90%
• Country: US
• Employees: 20,923
• Sector: Industrials
• Sector Strength: 85
• Industry: Aerospace & Defense
• EPS (TTM): 0.40
• Shares Outstanding: 183,658,200
• 10 Day Avg. Volume: 1,194,307
• 30 Day Avg. Volume: 1,120,189
• PEG Ratio: -0.74
• Price to Book (P/B): 16.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 85.69
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $50.33
• Price Target Upside: 4.22% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 76 Outperform
• Price Target: $55.00 ▲(13.90%Upside)

Embraer earns a strong overall score of 76 due to its robust financial performance, positive technical momentum, and optimistic earnings guidance. The company's successful turnaround from past losses, coupled with record revenue and high backlogs, positions it well for future growth. Valuation appears slightly high, which could limit upside, and challenges such as U.S. tariffs and delivery issues warrant attention. Nevertheless, Embraer's resilience and strategic positioning in the Aerospace & Defense industry underpin a positive outlook.

Positive Factors

Market Sentiment

Shares of Embraer are up approximately 100% in a year on improving operating results, sustained positive free cash flow, and a large backlog increase.

New Orders

Embraer recently secured a significant $7 billion business jet order from FlexJet, contributing to positive market sentiment.

Revenue Generation

With an all-time high backlog of USD26.4bn at end-Q1, Embraer offers strong revenue generation in the coming quarters.

Negative Factors

Profitability Concerns

An implied total tariff of up to $300M could still eat into profitability and/or weigh on the company's financial performance.

Tariff Risk

Unpriced tariff risk could arrive on April 2nd, presenting a material risk, particularly if VAT rates are included.

Embraer SA Business Overview & Revenue Model

Company Description

Embraer SA is a leading aerospace company based in Brazil, specializing in the design, development, manufacturing, and sale of aircraft and systems. The company operates in several sectors including commercial aviation, executive aviation, defense & security, and agricultural aviation. Embraer is renowned for its innovative and efficient aircraft solutions, offering a wide range of products such as regional jets, executive jets, and military aircraft.

How the Company Makes Money

Embraer SA generates revenue through the sale of its aircraft across its various sectors: commercial aviation, executive aviation, and defense & security. In commercial aviation, Embraer earns money by selling regional jets to airlines around the world. In executive aviation, the company provides business jets to corporate clients and private individuals. The defense & security division generates income through government contracts for military aircraft and related services. Additionally, Embraer supports its aircraft with a suite of after-sales services, including maintenance, repair, and overhaul (MRO), which contributes to ongoing revenue. Significant partnerships, such as joint ventures and collaborations with other aerospace companies, also play a crucial role in expanding Embraer's market reach and enhancing its revenue streams.

Embraer SA Financial Statement Overview

Summary

Embraer demonstrates solid financial performance with steady revenue growth, improved profitability, and efficient cash flow management. The company has successfully turned around from past losses, showing resilience and a positive growth trajectory. While the balance sheet is stable, further reduction in debt could enhance financial flexibility. Overall, Embraer is well-positioned in the Aerospace & Defense industry, with a strong financial foundation to support future growth.

Income Statement

Embraer has shown strong revenue growth with a TTM increase of 3.23% from the previous year. The gross profit margin stands at 17.78%, and the net profit margin has improved to 6.02% indicating enhanced profitability. The EBIT margin of 10.92% and EBITDA margin of 17.61% reflect operational efficiency. The company's trajectory from negative net income in 2020 to positive in recent years indicates a significant turnaround.

Balance Sheet

Embraer's balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.68, showing manageable leverage. The return on equity is 12.45%, which is a positive indicator of profitability for shareholders. The equity ratio is 27.26%, suggesting a solid equity base, though there is room for improvement in reducing liabilities further.

Cash Flow

The company exhibits strong cash flow management, with operating cash flow to net income ratio of 2.51 in TTM, indicating robust cash generation relative to earnings. Free cash flow has grown significantly, with a free cash flow to net income ratio of 1.26, highlighting the company's ability to generate cash efficiently and reinvest in growth.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
6.60B	6.39B	5.27B	4.54B	4.20B	3.77B
	Gross Profit
1.17B	1.15B	909.60M	912.20M	655.85M	477.60M
	EBIT
721.20M	667.50M	314.50M	-110.50M	201.30M	-323.40M
	EBITDA
1.16B	1.01B	598.20M	228.40M	479.90M	-123.30M
	Net Income Common Stockholders
397.20M	352.50M	164.00M	-185.40M	-44.70M	-731.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.36B	2.20B	2.15B	2.31B	2.57B	2.70B
	Total Assets
11.70B	11.82B	10.78B	10.14B	10.15B	10.52B
	Total Debt
2.17B	2.60B	2.98B	3.27B	4.09B	4.51B
	Net Debt
1.35B	1.04B	1.35B	1.46B	2.27B	2.63B
	Total Liabilities
8.23B	8.48B	7.74B	7.32B	7.38B	7.61B
	Stockholders Equity
3.19B	3.08B	2.79B	2.57B	2.67B	2.79B
Cash Flow		Free Cash Flow
499.10M	405.00M	186.20M	495.30M	247.10M	-1.51B
	Operating Cash Flow
995.20M	871.20M	617.00M	751.30M	515.30M	-1.29B
	Investing Cash Flow
-545.60M	-599.70M	-447.60M	-109.50M	-131.60M	-105.30M
	Financing Cash Flow
-548.40M	-335.70M	-348.70M	-669.20M	-441.04M	1.01B

Embraer SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 48.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ERJ, the sentiment is Positive. The current price of 48.29 is above the 20-day moving average (MA) of 47.82, above the 50-day MA of 46.15, and above the 200-day MA of 41.10, indicating a bullish trend. The MACD of 0.59 indicates Negative momentum. The RSI at 61.76 is Neutral, neither overbought nor oversold. The STOCH value of 80.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ERJ.

Embraer SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ERJ	76 Outperform	$8.80B	22.27	13.36%	0.41%	22.29%	51.90%
TXT	74 Outperform	$13.97B	17.52	11.70%	0.10%	0.57%	-5.62%
WWD	72 Outperform	$13.81B	37.49	16.35%	0.48%	4.96%	8.41%
DRS	71 Outperform	$12.26B	52.84	9.50%	0.78%	13.58%	25.96%
Sector *	66 Neutral	$4.47B	12.21	5.40%	3.65%	4.14%	-12.00%
BA	58 Neutral	$151.04B	―	-162.23%	―	-9.15%	-406.76%
SPR	37 Underperform	$4.34B	―	81.63%	―	-2.91%	-109.95%