Education
About Us
Working with TipRanks
Follow Us
Embraer-empresa Brasileira De Aeronautica (ERJ)
NYSE:ERJ
Top Page
Embraer SA
(NYSE:ERJ)
Select Model
Select Model
Rating:79Outperform
Price Target:
$66.00
▲(13.91% Upside)
Embraer's strong earnings call performance and positive technical indicators are the most significant factors driving the score. The company's solid financial performance and high dividend yield also contribute positively, although the high P/E ratio suggests a relatively expensive valuation. Concerns about U.S. tariffs and inflationary pressures are noted but do not outweigh the overall positive outlook.
Positive Factors
Strong Backlog and Orders
A robust backlog indicates strong future revenue potential and market demand, ensuring sustained production and financial stability over the coming months.
Debt Reduction
Reducing debt enhances financial flexibility and lowers interest expenses, improving overall financial health and enabling strategic investments.
Revenue Growth
Record-breaking revenue growth reflects strong operational performance and market demand, supporting long-term business expansion and profitability.
Negative Factors
Impact of U.S. Tariffs
Tariffs can increase costs and reduce competitiveness in the U.S. market, potentially impacting margins and profitability if not resolved.
Challenges with Azul
Financial challenges with key customers can affect cash flow and profitability, highlighting potential risks in customer concentration and credit management.
Inflationary and FX Pressures
These factors can erode margins and increase operational costs, impacting financial performance and requiring strategic management to mitigate risks.
Embraer SA (ERJ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$10.58B
Dividend Yield0.08%
Average Volume (3M)1.39M
Price to Earnings (P/E)28.2
Beta (1Y)0.78
Revenue Growth22.95%
EPS Growth-1.01%
CountryUS
Employees20,923
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.43
Shares Outstanding183,658,200
10 Day Avg. Volume1,141,742
30 Day Avg. Volume1,388,418
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.11
Enterprise Value/Revenue1.70
Enterprise Value/Gross Profit9.16
Enterprise Value/Ebitda10.93
Forecast
1Y Price Target
$61.43Price Target Upside6.02% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Embraer SA Business Overview & Revenue Model
Company DescriptionEmbraer 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 MoneyEmbraer generates revenue primarily through the sale of aircraft across its three main business segments: Commercial Aviation, Defense & Security, and Executive Jets. The company earns significant income from the sale of new aircraft, as well as from aftermarket services, which include maintenance, repair, and spare parts. Additionally, Embraer has established strategic partnerships and joint ventures, such as its collaboration with Boeing under the Embraer-Boeing joint venture, which enhances its market reach and product offerings. Government contracts and defense orders also contribute to its revenue, particularly in the military segment. Overall, Embraer's revenue model is driven by a combination of aircraft sales, service agreements, and partnerships that strengthen its position in the aerospace industry.
Embraer SA Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted Embraer's record-breaking revenue, strong backlog, and significant orders across segments, reflecting solid growth and operational efficiency. However, concerns about U.S. tariffs, challenges with certain customers, and potential inflationary and FX pressures balanced the positive aspects.Q2-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Embraer delivered the highest second quarter revenue in its history, totaling $1.8 billion, with an adjusted EBIT margin of 10.5%, the highest for a second quarter over the past decade.
Strong Backlog and Book-to-Bill Ratio
The backlog reached a new all-time high of $29.7 billion, driven by strong demand across all business units, with a book-to-bill ratio close to 2:1 in the last 12 months.
Significant Orders and Deliveries
Commercial Aviation saw significant orders including SAS's order of 45 E195-E2s and SkyWest's purchase of 60 E175s. Deliveries were up 30% year-over-year.
Executive Aviation and Defense Success
Executive Aviation delivered record second quarter revenue of $550 million with a robust backlog, and Defense & Security saw a $4.3 billion backlog with notable orders from Portugal and Lithuania.
Debt Reduction and Financial Health
Embraer significantly reduced its gross and net debt by approximately $560 million and $720 million, respectively, with a net debt to EBITDA ratio of 0.7x.
Negative Updates
Impact of U.S. Tariffs
U.S. tariffs continue to be a concern, with a current 10% impact already considered in forecasts. Further negotiations are in progress to address these tariffs.
Challenges with Azul
The restructuring process with customer Azul led to write-offs and provisioning for bad debts, impacting the Service & Support segment's EBIT margin.
Inflationary and FX Pressures
Inflationary pressures, foreign exchange rate volatility, and ongoing tariff issues in the U.S. present challenges for the second half of the year, impacting margins.
Company Guidance
During the second quarter of 2025, Embraer reported its highest-ever quarterly revenue of $1.8 billion, with an adjusted EBIT margin of 10.5%, marking the highest level for a second quarter in the past decade. The company's backlog reached an all-time high of $29.7 billion, driven by strong demand across all business units, with deliveries up 30% year-over-year. Embraer's book-to-bill ratio was close to 2:1 over the last 12 months. In Commercial Aviation, the division recorded a backlog of $13.1 billion, supported by a 1.8:1 book-to-bill ratio. Executive Aviation achieved record second-quarter revenue of approximately $550 million and a $7.4 billion backlog, with a 2.4:1 book-to-bill ratio. The Defense & Security division ended the quarter with a $4.3 billion backlog and a 3.6:1 book-to-bill ratio, while Service & Support closed with a $4.9 billion backlog and a 2:1 book-to-bill ratio. Despite concerns over U.S. tariffs, the impact has been managed and factored into the year's forecast, presenting an upside potential should tariffs return to zero. Overall, Embraer remains confident in achieving its 2025 guidance of $7 billion to $7.5 billion in revenues, with adjusted EBIT margins between 7.5% and 8.3%, and more than $200 million in free cash flow.Embraer SA Financial Statement Overview
Summary
Embraer demonstrates solid financial performance with strong 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.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.75
Positive
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.70
Positive
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.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.92B | 6.39B | 5.27B | 4.54B | 4.20B | 3.77B |
| Gross Profit | 1.29B | 1.15B | 909.60M | 912.20M | 655.85M | 477.60M |
| EBITDA | 1.08B | 1.01B | 598.20M | 228.40M | 479.90M | -123.30M |
| Net Income | 376.99M | 352.50M | 164.00M | -185.40M | -44.70M | -731.90M |
Balance Sheet | ||||||
| Total Assets | 12.07B | 11.82B | 10.78B | 10.14B | 10.15B | 10.52B |
| Cash, Cash Equivalents and Short-Term Investments | 1.26B | 2.20B | 2.15B | 2.31B | 2.57B | 2.70B |
| Total Debt | 2.32B | 2.60B | 2.98B | 3.27B | 4.09B | 4.51B |
| Total Liabilities | 8.46B | 8.48B | 7.74B | 7.32B | 7.38B | 7.61B |
| Stockholders Equity | 3.31B | 3.08B | 2.79B | 2.57B | 2.67B | 2.79B |
Cash Flow | ||||||
| Free Cash Flow | 533.07M | 405.00M | 186.20M | 495.30M | 247.10M | -1.51B |
| Operating Cash Flow | 945.96M | 871.20M | 617.00M | 751.30M | 515.30M | -1.29B |
| Investing Cash Flow | -586.26M | -599.70M | -447.60M | -109.50M | -131.60M | -105.30M |
| Financing Cash Flow | -437.80M | -335.70M | -348.70M | -669.20M | -441.04M | 1.01B |
Embraer SA Technical Analysis
Positive
57.94
Price Trends
55.64
Positive
52.97
Positive
47.80
Positive
Market Momentum
0.38
Positive
53.05
Neutral
21.73
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 57.94 is above the 20-day moving average (MA) of 57.71, above the 50-day MA of 55.64, and above the 200-day MA of 47.80, indicating a bullish trend. The MACD of 0.38 indicates Positive momentum. The RSI at 53.05 is Neutral, neither overbought nor oversold. The STOCH value of 21.73 is Neutral, 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 3 New Risks
1.
We do not have a controlling shareholder and as a result we may be subject to certain risks. Q4, 2023
2.
We are subject to significant competition. Q4, 2023
3.
We face risks of being engaged in a global business and operating in global industries, which may adversely affect us. Q4, 2023
Embraer SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $10.58B | 28.18 | 12.21% | 0.08% | 22.95% | -1.01% | |
75 Outperform | 11.03B | 44.54 | 8.33% | 0.65% | 11.43% | 32.31% | |
73 Outperform | 14.28B | 37.67 | 15.71% | 0.46% | 5.53% | 5.56% | |
71 Outperform | 14.90B | 18.92 | 10.98% | 0.10% | 1.19% | -6.77% | |
45 Neutral | 163.07B | -13.05 | 324.22% | ― | 2.41% | -193.57% | |
41 Neutral | 4.52B | -1.92 | 81.63% | ― | -2.60% | -94.76% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
ERJ
Embraer SA
57.94
22.35
62.80%
BA
Boeing
215.65
59.35
37.97%
LHX
L3Harris Technologies
283.94
50.81
21.79%
LMT
Lockheed Martin
472.94
-91.69
-16.24%
NOC
Northrop Grumman
573.03
49.08
9.37%
TXT
Textron
83.62
-3.18
-3.66%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.