Embraer SA (ERJ) AI Stock Analysis

Compare

844 Followers

ERJ Dividends

Top Page

Embraer SA

(NYSE:ERJ)

71Outperform

Embraer SA's strong financial recovery and robust earnings performance are significant positives, driving an overall score of 71. The company's strategic achievements in revenue and backlog are encouraging, though supply chain challenges and U.S. market uncertainties pose potential risks. The technical analysis suggests a cautious outlook, while the valuation indicates moderate investor confidence.

Positive Factors

Market Sentiment

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

New Orders

Embraer secures a historic order for E2s, marking a breakthrough into a growing market for its E2 family within the small narrowbody segment.

Operating Performance

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

Negative Factors

Order Cancellation Risk

There may be higher risk to Embraer should order cancellation occur for any reason.

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 Risks

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

Embraer SA (ERJ) vs. S&P 500 (SPY)

Market Cap

$8.54B

Dividend YieldN/A

Average Volume (3M)1.76M

Price to Earnings (P/E)24.2

Beta (1Y)1.12

Revenue Growth22.75%

EPS Growth117.20%

CountryUS

Employees20,923

SectorIndustrials

Sector Strength78

IndustryAerospace & Defense

Share Statistics

EPS (TTM)0.40

Shares Outstanding183,658,200

10 Day Avg. Volume873,181

30 Day Avg. Volume1,759,990

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$48.00

Price Target Upside3.07% Upside

Rating ConsensusHold

Number of Analyst Covering4

Embraer SA Business Overview & Revenue Model

Company DescriptionEmbraer 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 MoneyEmbraer 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 SA shows strong financial recovery with improved profitability and cash flow generation. The balance sheet is stable, though reliance on debt poses some risk.

Income Statement

Positive

Embraer SA has shown a significant recovery in its financial performance with a strong revenue growth rate from 2023 to 2024. The gross profit margin and net profit margin have improved, reflecting better cost control and profitability. The EBIT and EBITDA margins are robust, indicating efficient operations. However, historical volatility in net income highlights potential risks.

Balance Sheet

Positive

The company's balance sheet reflects a stable financial position with a reasonable debt-to-equity ratio, indicating manageable leverage. Return on equity has improved significantly, suggesting better utilization of shareholder funds. However, the equity ratio suggests moderate reliance on debt financing, which could pose risks if market conditions change.

Cash Flow

Positive

Embraer SA's cash flow performance is strong, with a notable increase in free cash flow and healthy operating cash flow to net income ratio. The company has demonstrated an ability to generate cash effectively, although historical fluctuations in free cash flow growth indicate potential volatility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
35.42B	5.27B	4.54B	4.20B	3.77B
	Gross Profit
6.38B	909.60M	912.20M	659.60M	477.60M
	EBIT
3.34B	314.50M	-110.50M	201.30M	-323.40M
	EBITDA
3.50B	583.40M	215.90M	479.90M	-123.30M
	Net Income Common Stockholders
1.92B	164.00M	-185.40M	-44.70M	-731.90M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
13.64B	2.15B	2.31B	2.57B	2.70B
	Total Assets
73.22B	10.78B	10.14B	10.15B	10.55B
	Total Debt
16.12B	2.98B	3.27B	4.09B	4.53B
	Net Debt
6.44B	1.35B	1.46B	2.27B	2.64B
	Total Liabilities
52.51B	7.74B	7.32B	7.38B	7.61B
	Stockholders Equity
19.05B	2.79B	2.57B	2.67B	2.83B
Cash Flow		Free Cash Flow
4.46B	186.20M	495.30M	247.10M	-1.51B
	Operating Cash Flow
5.53B	617.00M	751.30M	515.30M	-1.29B
	Investing Cash Flow
-3.21B	-447.60M	-109.50M	-131.60M	-105.30M
	Financing Cash Flow
-1.91B	-348.70M	-669.20M	-430.60M	1.01B

Embraer SA Technical Analysis

Technical Analysis Sentiment

Positive

Last Price46.57

Price Trends

50DMA

46.98

Negative

100DMA

43.19

Positive

200DMA

38.69

Positive

Market Momentum

MACD

0.19

Negative

RSI

55.90

Neutral

STOCH

81.91

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 46.57 is above the 20-day moving average (MA) of 44.00, below the 50-day MA of 46.98, and above the 200-day MA of 38.69, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 55.90 is Neutral, neither overbought nor oversold. The STOCH value of 81.91 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ERJ.

Embraer SA Risk Analysis

Embraer SA disclosed 38 risk factors in its most recent earnings report. Embraer SA reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Embraer SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WWD	79 Outperform	$11.54B	31.33	16.35%	0.53%	4.96%	8.41%
TXT	73 Outperform	$12.82B	16.08	11.70%	0.11%	0.57%	-5.62%
ERJ	71 Outperform	$8.54B	24.25	12.07%	―	22.75%	117.20%
DRS	71 Outperform	$11.17B	48.17	9.50%	0.21%	13.58%	25.96%
Sector *	64 Neutral	$4.27B	11.80	5.31%	249.79%	4.07%	-9.02%
BA	52 Neutral	$139.84B	―	-162.23%	―	-9.15%	-406.76%
SPR	41 Neutral	$4.22B	―	81.63%	―	-2.91%	-109.95%

* Industrials Sector Average

Performance Comparison

ERJ

Embraer SA

46.46

19.89

74.86%

Boeing

185.96

9.25

5.23%

DRS

Leonardo Drs

41.77

20.16

93.29%

SPR

Spirit AeroSystems

35.78

2.87

8.72%

TXT

Textron

69.49

-17.91

-20.49%

WWD

Woodward

196.08

20.66

11.78%

Embraer SA Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 0.00%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong revenue growth and operational improvements across segments, particularly in Executive Aviation and Defense. However, concerns over U.S. tariffs and their impact on margins, combined with some delivery issues, present challenges. Despite these issues, the company's financial and operational achievements suggest a positive outlook.

Q1-2025 Updates

Positive Updates

Record-Breaking Revenue

Embraer delivered the highest first quarter revenue of the past 90 years at $1.1 billion, marking a 22% increase year-on-year.

Executive Aviation Performance

Executive Aviation reached the highest first quarter revenue since 2014 with a record backlog of $7.6 billion.

Defense and Security Growth

Defense and security revenue grew 72% due to stronger KC-390 revenue recognition and new firm orders from countries like Uruguay and Panama.

Aircraft Deliveries Increase

Aircraft deliveries were up by almost 30% year-on-year, with a total of 30 aircraft delivered in Commercial and Executive Aviation.

Financial Strength

Embraer reduced its net and gross debt positions by $508 million and ended the period with a $26.4 billion backlog, a 25% increase year-on-year.

Adjusted EBITDA Growth

The adjusted EBITDA for the quarter was $109 million with a 9.8% margin, supported by higher volumes in Executive Aviation and lower costs.

Negative Updates

Impact of U.S. Tariffs

U.S. tariffs are estimated to negatively impact EBITDA margin by 90 basis points for 2025, particularly affecting Executive Aviation and Service and Support segments.

Commercial Aviation Deliveries

Commercial Aviation deliveries remained stable with seven aircraft, unable to deliver two additional aircraft due to commercial issues.

Adjusted Free Cash Flow

The company consumed $386 million in adjusted free cash flow due to high working capital needs and inventory preparation.

Service and Support Margin Decrease

The adjusted EBIT margin for Service and Support decreased due to product mix and the start of North American Executive MRO ramp-up.

Company Guidance

During Embraer's first quarter 2025 earnings call, the company provided robust guidance indicating strong performance metrics. Embraer achieved a record first-quarter revenue of $1.1 billion, marking the highest in the past 90 years, with an adjusted EBITDA margin of nearly 10%, the best in five years. The company's backlog reached an all-time high of $26.4 billion, a 25% year-over-year increase. Aircraft deliveries rose by almost 30% year-on-year, underscoring operational efficiency. The Executive Aviation division recorded its highest first-quarter revenue since 2014 with a backlog of $7.6 billion. In Defense and Security, new orders from Sweden, Slovakia, Uruguay, and Panama bolstered a stable $4.2 billion backlog. Commercial Aviation saw a $10 billion backlog, with significant orders expected from Japanese ANA. Service and Support maintained a $4.6 billion backlog, reflecting steady growth. Embraer reiterated its 2025 guidance, anticipating double-digit growth in aircraft deliveries and revenue, while actively working to mitigate the limited impact of recent U.S. tariffs.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.