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 #1 (Strong Buy) stock an attractive investment pick at the moment.Growth Projections & Surprise History of EmbraerThe Zacks Consensus Estimate for ERJ’s 2025 earnings per share (EPS) has increased 9.3% to $2.24 in the past 30 days.The consensus estimate for total revenues is $7.36 billion, which indicates growth of 15.1% from the year-ago figure.ERJ delivered an average earnings surprise of 138.39% 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 14.3% compared with the industry’s average of 6.25%. This indicates that the company has been utilizing its funds more constructively than its peers in the industry.ERJ’s Debt PositionCurrently, the company’s total debt to capital is 42.69%, better than the industry’s average of 53.11%.ERJ’s times interest earned (TIE) ratio at the end of the fourth quarter was 2.34. 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 fourth quarter was 1.48, which was above the industry’s current ratio of 1.17. 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 RPKs to increase 8% in 2025 from the 2024 level, backed by a solid 6.7% expected rise 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 $17.6 billion for the commercial aviation and executive aviation segments as of Dec. 31, 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 35.5% in the past six months against the industry’s 8.2% decline.Image Source: Zacks Investment ResearchOther Stocks to ConsiderOther top-ranked stocks from the same sector are Heico HEI, Triumph Group TGI and Leidos Holdings, Inc. LDOS. Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Heico has a long-term earnings growth rate of 17%. The Zacks Consensus Estimate for HEI’s fiscal 2025 sales is pinned at $4.29 billion, which indicates year-over-year growth of 11.3%.Triumph Group delivered an average earnings surprise of 159.38% in the last four quarters. The Zacks Consensus Estimate for TGI’s fiscal 2026 sales is pinned at $1.32 billion, which indicates growth of 11.5% from the fiscal 2025 estimated figure.Leidos Holdings has a long-term earnings growth rate of 7.4%. The Zacks Consensus Estimate for LDOS’ 2025 sales is pinned at $17.1 billion, which indicates year-over-year growth of 2.6%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 Triumph Group, Inc. (TGI): Free Stock Analysis Report Heico Corporation (HEI): Free Stock Analysis Report Leidos Holdings, Inc. (LDOS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks