Here's Why You Should Add Embraer Stock to Your Portfolio Right Now

Embraer S.A. ERJ, with rising earnings estimates, robust return on equity (ROE), increasing investments and a solid backlog, offers a great investment opportunity in the Zacks Aerospace Defense industry.Let’s focus on the reasons that make this Zacks Rank #2 (Buy) stock an attractive investment pick at the moment.Growth Projections & Surprise History of EmbraerThe Zacks Consensus Estimate for ERJ’s 2024 earnings per share (EPS) has increased 26.5% to $2.05 in the past 30 days, indicating a massive 376.7% improvement from the year-ago figure. The consensus estimate for total revenues is $6.25 billion, which indicates growth of 18.6% from the 2023 figure.ERJ delivered an average earnings surprise of 127.28% in the last four quarters.ERJ’s ROEROE indicates how efficiently a company has been utilizing its funds to generate higher returns. ERJ’s current ROE is 11.62% compared with the industry’s average of 9.59%. This indicates that the company has been utilizing its funds more constructively than its peers in the sector.ERJ’s Debt PositionCurrently, the company’s total debt to capital is 43.65%, better than the industry’s average of 55%.ERJ’s times interest earned (TIE) ratio at the end of the third quarter was 2.56. A TIE ratio of more than one indicates that the company will be able to meet its interest payment obligations in the near term without any problems.Embraer’s LiquidityERJ’s current ratio at the end of the third quarter was 1.56. A current ratio of greater than one indicates the company’s ability to meet its future short-term liabilities without difficulties.ERJ’s Backlog and InvestmentsInternational Air Transport Association projects total global revenue passenger kilometers (RPKs) to increase 11.6% in 2024 from the 2023 level, backed by a solid 10.4% rise (anticipated) in the global air passenger numbers. To reap the benefits of such growth opportunities, airlines are expanding their fleet size, which in turn, has been bolstering order growth for jet manufacturers like Embraer.Embraer had an excellent backlog of $15.5 billion for commercial aviation and executive aviation segments as of Sept. 30, 2024.Apart from manufacturing aircraft, Embraer has also been undertaking other initiatives to strengthen its footprint in the global aerospace sector. In October 2024, the company disclosed its plan to invest up to $70 million in new Maintenance, Repair and Overhaul (MRO) facilities in the United States, with the launch of a new service center at the Perot Field Alliance Airport, in Fort Worth, TX. This facility expansion is likely to bolster ERJ’s position in the aircraft MRO market space.ERJ Stock’s Price PerformanceShares of ERJ have gained 12.9% in the past three months against the industry’s 9.6% decline.Image Source: Zacks Investment ResearchOther Stocks to ConsiderSome other top-ranked stocks from the same sector are Leidos Holdings, Inc. LDOS, Intuitive Machines, Inc. LUNR and AAR Corporation AIR. Leidos sports a Zacks Rank #1 (Strong Buy), while Intuitive Machines and AAR carry a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Leidos delivered an average earnings surprise of 29.92% in the last four quarters. The Zacks Consensus Estimate for LDOS’ 2024 sales is pinned at $16.39 billion, which indicates year-over-year growth of 6.1%.Intuitive Machines delivered an average earnings surprise of 34.50% in the last four quarters. The consensus estimate for LUNR’s 2024 sales is pinned at $230.3 million, which indicates year-over-year growth of 189.6%.AAR delivered an average earnings surprise of 1.80% in the last four quarters. The Zacks Consensus Estimate for AIR’s 2024 sales is pinned at $2.70 billion, which indicates year-over-year growth of 21.9%.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Embraer-Empresa Brasileira de Aeronautica (ERJ): Free Stock Analysis Report AAR Corp. (AIR): Free Stock Analysis Report Leidos Holdings, Inc. (LDOS): Free Stock Analysis Report Intuitive Machines, Inc. (LUNR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks