Embraer Wins $5.8B Porter Jet Order; Stock Up 8%

Brazil-based Embraer (ERJ) has secured an order to supply Canada’s Porter Airlines with as many as 80 of its model E195-E2 jets. Embraer stock jumped 7.82% on Monday to close at $15.16.

Porter has initially placed a firm order for 30 jets, with an option to purchase an additional 50 to expand its fleet. The order is worth $5.82 billion, and Embraer plans to include it in its second-quarter backlog. Embraer first announced the order in May but didn’t reveal the customer.

“As the quietest and most fuel-efficient aircraft in the segment, the E195-E2 also delivers excellent economic performance that shines through,” said Embraer Commercial Aviation CEO Arjan Meijer.

“Embraer’s E2, with its spacious cabin, quiet operations, and no middle seats, provides the refined comfortable experience upon which Porter has built its reputation for service and quality,” commented Porter’s CEO Michael Deluce.

Porter is set to become the first North American airline to fly Embraer’s E2 jets. The airline plans to use the jets to fly customers to popular leisure and business destinations in Canada, the U.S., Mexico, and the Caribbean.

Embraer expects to start delivering the jets to Porter in the second half of 2022. The E195-E2 aircraft can carry 120 – 146 passengers. The exact configuration for Porter’s order will be revealed at a later stage. (See Embraer stock charts on TipRanks).

In June, Cowen analyst Cai von Rumohr reiterated a Hold rating on Embraer stock and raised the price target to $17 from $12. Rumohr’s new price target suggests 12.14% upside potential.

Consensus among analysts is a Hold based on 1 Buy, 2 Holds, and 1 Sell. The average Embraer price target of $13.40 implies 11.61% downside potential to current levels.

ERJ scores a 7 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.