A look into Embraer S.A. (ERJ)’s deeper side

Embraer S.A. (NYSE: ERJ) stock jumped 3.69% on Friday to $9.55 against a previous-day closing price of $9.21. With 1.34 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.35 million shares. During the session, the Aerospace & Defense company that operates in wider Industrials sector, reached to the highest price of $9.57 whereas the lowest price it dropped to was $9.16. The 52-week range on ERJ shows that it touched its highest point at $19.40 and its lowest point at $7.91 during that stretch. It currently has a 1-year price target of $18.90. Beta for the stock currently stands at 1.19.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ERJ was up-trending over the past week, with a rise of 4.95%, but this was up by 11.31% over a month. Three-month performance dropped to -16.59% while six-month performance fell -39.25%. The stock lost -34.63% in the past year, while it has lost -46.20% so far this year. A look at the trailing 12-month EPS for ERJ yields 0.05 with Next year EPS estimates of 0.68. For the next quarter, that number is -0.09. This implies an EPS growth rate of 92.40% for this year and 362.59% for next year. EPS is expected to grow by 4.08% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -19.80%.

Float and Shares Shorts:

At present, 183.66 million ERJ shares are outstanding with a float of 175.18 million shares on hand for trading. On Jul 14, 2022, short shares totaled 4.38 million, which was 2.38% higher than short shares on Jun 14, 2022. In addition to Mr. Francisco Gomes Neto as the firm’s Pres & CEO, Mr. Antonio Carlos Garcia serves as its CFO, Exec. VP & Head of Investor Relations.

Institutional Ownership:

Through their ownership of 40.72% of ERJ’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 29.88% of ERJ, in contrast to 11.22% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in ERJ with 10.32% of the stake, Brandes Investment Partners LP holds 19,098,457 shares worth 19,098,457. A second-largest stockholder of ERJ, American Century Investment Manag, holds 3,858,310 shares, controlling over 2.08% of the firm’s shares. SPX Equities Gestão de Recursos L is the third largest shareholder in ERJ, holding 3,787,776 shares or 2.05% stake. With a 1.14% stake in ERJ, the Brandes Emerging Markets Value Fu is the largest stakeholder. A total of 2,113,695 shares are owned by the mutual fund manager. The Fidelity Series Large Cap Stock F, which owns about 0.83% of ERJ stock, is the second-largest Mutual Fund holder. It holds 1,529,100 shares valued at 13.43 million. American Century Emerging Markets holds 0.81% of the stake in ERJ, owning 1,502,918 shares worth 13.2 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ERJ since 12 analysts follow the stock currently. There are 9 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 3 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ERJ analysts setting a high price target of $32.00 and a low target of $5.06, the average target price over the next 12 months is $18.64. Based on these targets, ERJ could surge 235.08% to reach the target high and fall by -47.02% to reach the target low. Reaching the average price target will result in a growth of 95.18% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ERJ will report FY 2022 earnings on 03/09/2023. Analysts have provided yearly estimates in a range of $0.38 being high and -$0.17 being low. For ERJ, this leads to a yearly average estimate of $0.07. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Embraer S.A. surprised analysts by $0.04 when it reported -$0.17 EPS against a consensus estimate of -$0.21. The surprise factor in the prior quarter was -$0.05. Based on analyst estimates, the high estimate for the next quarter is -$0.05 and the low estimate is -$0.09. The average estimate for the next quarter is thus -$0.07.

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