Zacks Investment Research Lowers Embraer SA (ERJ) to Hold
Embraer SA (NYSE:ERJ) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a report released on Wednesday.
According to Zacks, “Embraer continues to lead the 70- to 130-seat commercial jet market. Moreover, Embraer sees more room for growth given the rising air traffic. In its 20-year Market Outlook, the company stated that it expects total market deliveries of 6,400 jets – 2,300 units in the 70- to 90-seat segment and 4,100 units in the 90- to 130-seat segment by 2035. In the near term, the company expects to invest $325 million in product development in 2016 mainly on the new generation of planes. Further the company’s investment plans for product development in 2016 will likely ensure strong demand for its products and drive bottom-line growth. However, Embraer operates in a highly competitive commercial aircraft manufacturing industry, which requires it to invest heavily in technology and performance enhancement to meet growing demand in this industry. Also, the company remains highly exposed to foreign currency fluctuations.”
Several other research firms have also issued reports on ERJ. Drexel Hamilton reaffirmed a “hold” rating on shares of Embraer SA in a research note on Tuesday, July 12th. Cowen and Company raised Embraer SA from a “market perform” rating to an “outperform” rating and set a $24.00 price objective for the company in a research note on Tuesday. HSBC lowered Embraer SA from a “buy” rating to a “hold” rating and set a $19.00 price objective for the company. in a research note on Monday, August 1st. Scotiabank raised Embraer SA from a “sector perform” rating to an “outperform” rating in a research note on Friday, October 14th. Finally, JPMorgan Chase & Co. started coverage on Embraer SA in a research note on Thursday, October 6th. They set an “overweight” rating for the company. Five investment analysts have rated the stock with a hold rating and seven have issued a buy rating to the stock. The company currently has an average rating of “Buy” and an average target price of $25.14.
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Shares of Embraer SA (NYSE:ERJ) traded down 0.05% during midday trading on Wednesday, reaching $19.85. The company had a trading volume of 926,993 shares. The firm’s 50 day moving average price is $18.35 and its 200-day moving average price is $20.56. The stock has a market capitalization of $14.58 billion, a price-to-earnings ratio of 536.49 and a beta of 0.83. Embraer SA has a 1-year low of $17.06 and a 1-year high of $32.50.
Embraer SA (NYSE:ERJ) last posted its quarterly earnings data on Friday, July 29th. The company reported ($0.54) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.50 by $1.04. The company earned $1.37 billion during the quarter, compared to the consensus estimate of $1.44 billion. Embraer SA had a net margin of 0.10% and a return on equity of 3.74%. Embraer SA’s revenue for the quarter was down 9.7% on a year-over-year basis. During the same period in the previous year, the business earned $0.71 earnings per share. Equities research analysts expect that Embraer SA will post $0.98 EPS for the current fiscal year.
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. M&T Bank Corp increased its position in Embraer SA by 6.4% in the second quarter. M&T Bank Corp now owns 63,912 shares of the company’s stock valued at $1,389,000 after buying an additional 3,870 shares during the last quarter. BNP Paribas Arbitrage SA increased its position in Embraer SA by 181.2% in the second quarter. BNP Paribas Arbitrage SA now owns 27,978 shares of the company’s stock valued at $608,000 after buying an additional 18,027 shares during the last quarter. Telemus Capital LLC increased its position in Embraer SA by 17.5% in the second quarter. Telemus Capital LLC now owns 9,332 shares of the company’s stock valued at $203,000 after buying an additional 1,388 shares during the last quarter. Westpac Banking Corp purchased a new position in Embraer SA during the second quarter valued at approximately $763,000. Finally, Natixis increased its position in Embraer SA by 71.1% in the first quarter. Natixis now owns 23,096 shares of the company’s stock valued at $609,000 after buying an additional 9,595 shares during the last quarter. Institutional investors own 51.92% of the company’s stock.
About Embraer SA
Embraer SA is a Brazil-based company that produces aircraft for commercial and executive aviation, and for defense and security purposes and related services. The Company’s segments include Commercial aviation business, Defense and security business, Executive Jet business and Other. Its Commercial Aviation business segment mainly involves the development, production and sale of commercial jets, and rendering of support services.
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