Brazil-based aircraft manufacturer Embraer rallied Tuesday on a price target hike after on Monday reporting mixed fourth-quarter performance.
TD Cowen on Tuesday lifted its price target on Embraer stock to $26 from $18 after Q4 results, noting strong order prospects. However, Brazilian dividend regulations and potential new product launches could limit cash returns to shareholders. TD Cowen maintained a Market Perform rating ERJ stock.
Embraer on Monday reported earnings of $1.05 per share, increased from 12 cents per share the year prior. Adjusted earnings rose nearly 80% to 42 cents per share. Revenue eased 0.8% to $1.975 billion.
FactSet expected earnings of 68 cents per share on $1.996 billion in revenue. Analysts estimated adjusted earnings of 59 cents per share.
Embraer delivered 75 jets in Q4, including 25 commercial aircraft, 49 executive jets and one military C-390. Full-year deliveries rose 13% to 181 aircraft.
Embraer guided 2024 deliveries for its commercial and executive aviation divisions between 197 and 215 planes. The company expects to deliver 72 to 80 commercial aircraft and 125 to 135 executive jets. Embraer sees 2024 revenue between $6 billion and $6.4 billion, increasing from $5.27 billion for 2023.
FactSet analysts predict 2024 earnings of 57 cents per share on $6.22 billion in sales.
Meanwhile, Morgan Stanley on Thursday named Embraer its new top pick in aerospace, replacing TransDigm. Embraer is "entering a harvest period" following decades of investments, analyst Kristin Liwag wrote in a research note. Liwag views Embraer as a third commercial aerospace player that's "breaking into the duopoly" of Boeing and Airbus. Morgan Stanley has an overweight rating on ERJ stock and hoisted its price target to $40 price from $19.50.
Embraer Stock
Embraer trades in American depositary receipts (ADRs) under the ticker ERJ.
ERJ shares jumped 6.8% Tuesday, adding to their 0.6% gain Monday. The stock fell 4% early Monday, after jumping 4.2% premarket. Embraer is extended about 25% from a cup buy point after a March 1 breakout.
The stock rallied nearly 36% so far this year.
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