Embraer SA (ERJ) AI Stock Analysis

• Market Cap: $7.83B
• Dividend Yield: N/A
• Average Volume (3M): 2.17M
• Price to Earnings (P/E): 22.2
• Beta (1Y): 1.15
• Revenue Growth: 22.75%
• EPS Growth: 117.20%
• Country: US
• Employees: 20,923
• Sector: Industrials
• Sector Strength: 66
• Industry: Aerospace & Defense
• EPS (TTM): 1.92
• Shares Outstanding: 183,658,200
• 10 Day Avg. Volume: 2,105,881
• 30 Day Avg. Volume: 2,169,778
• PEG Ratio: 0.19
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.84
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• 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: $52.50
• Price Target Upside: 18.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

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 Business Overview & Revenue Model

Company Description

Embraer S.A. designs, develops, manufactures, and sells aircrafts and systems in Brazil, North America, Latin America, the Asia Pacific, Brazil, Europe, and internationally. It operates through Commercial Aviation; Defense and Security; Executive Jets; Service & Support; and Other segments. The Commercial Aviation segment designs, develops, and manufactures a variety of commercial aircrafts. The Defense and Security segment engages in the research, development, production, modification, and support for military defense and security aircraft; and offers a range of products and integrated solutions that include radars and special space systems, as well as information and communications systems comprising command, control, communications, computer, intelligence, surveillance, and reconnaissance systems. The Executive Jets segment develops, produces, and sells executive jets. It also leases Legacy 600 and Legacy 650 executive jets in the super midsize and large categories; Legacy 450 and Legacy 500 executive jets in the midlight and midsize categories; Phenom family executive jets in the entry jet and light jet categories; Lineage 1000, an ultra-large executive jet; and Praetor 500 and Praetor 600, disruptive executive jets in the midsize and super midsize categories. The Service & Support segment offers after-service solutions, support, and maintenance, repair, and overhaul services for commercial, executive, and defense aircrafts; provides aircraft components and engines; and supplies steel and composite aviation structures to various aircraft manufacturers. The Other segment is involved in the supply of fuel systems, structural parts, and mechanical and hydraulic systems; and production of agricultural crop-spraying aircraft. The company was formerly known as Embraer-Empresa Brasileira de Aeronáutica S.A. and changed its name to Embraer S.A. in November 2010. Embraer S.A. was incorporated in 1969 and is headquartered in São Paulo, Brazil.

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 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

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

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

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
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 Price: 44.25
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 44.25 is above the 20-day moving average (MA) of 43.82, below the 50-day MA of 46.32, and above the 200-day MA of 37.94, indicating a neutral trend. The MACD of -1.23 indicates Negative momentum. The RSI at 48.69 is Neutral, neither overbought nor oversold. The STOCH value of 69.50 is Neutral, 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
DRS	76 Outperform	$9.21B	43.50	8.73%	0.26%	14.44%	26.36%
WWD	73 Outperform	$9.96B	28.07	16.82%	0.61%	7.38%	26.61%
ERJ	71 Outperform	$7.83B	22.24	12.07%	―	22.75%	117.20%
Sector *	63 Neutral	$4.14B	11.23	5.47%	215.40%	4.10%	-8.63%
TXT	62 Neutral	$11.99B	15.25	11.63%	0.12%	0.14%	-5.38%
BA	48 Neutral	$122.28B	―	-162.23%	―	-14.49%	-399.90%
SPR	37 Underperform	$3.85B	―	81.63%	―	4.44%	-202.63%