Bank of America Securities analyst Ronald Epstein maintained a Buy rating on Embraer SA (ERJ – Research Report) yesterday and set a price target of $55.00.
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Ronald Epstein has given his Buy rating due to a combination of factors including a significant purchase agreement and favorable industry trends. A key reason is the substantial order from FlexJet, a fractional jet fleet operator, which agreed to purchase up to $7 billion worth of Embraer business jets. This order, consisting of 182 firm aircraft and additional options, reflects strong confidence in Embraer’s executive jets.
Another factor supporting the Buy rating is the observed trend towards fractional ownership in the aviation industry, which appears to be a sustainable shift post-Covid. While this order boosts Embraer’s opportunities, Epstein does caution about the potential increased risk associated with having a large portion of FlexJet’s fleet comprised of Embraer jets, should any order cancellations occur. Nonetheless, he anticipates a positive market reaction to the news, maintaining the Buy rating.