Embraer S.A. [ERJ] moved down -0.64: Why It’s Important

Embraer S.A. [NYSE: ERJ] loss -0.64% or -0.04 points to close at $6.22 with a heavy trading volume of 1840032 shares. The company report on November 17, 2020 that Hungary signs contract for acquisition of Two Multi-Mission KC-390 Millennium Airlifters.

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The Hungarian Government and Embraer (B3: EMBR3, NYSE: ERJ) signed a contract for the acquisition of two new generation multi-mission transport aircraft Embraer C-390 Millennium, in its air-to-air refueling (AAR) configuration, designated KC-390. Additionally, pilots and technicians training as well as other services and support are included in the contract as part of the process to strengthen the Hungarian Defence Forces capabilities specifically on the tactical airlift, AAR and medical evacuation roles as well as in other missions of public interest. Deliveries are scheduled to start in 2023.

“Following the procurement of personnel air transport capabilities in 2018, we will see the arrival of KC-390 aircraft to Hungary in 2023-24, able to deliver large military loads in an operational environment, as well as providing air-to-air refueling services. We are acquiring a multi-role transport fleet for the Hungarian Defence Forces to fulfill the widest possible range of tasks within the national framework, in a sovereign way,” said Gáspár Maróth, government commissioner responsible for defence development.

It opened the trading session at $6.25, the shares rose to $6.30 and dropped to $6.1304, the range by which the price of stock traded the whole day. The daily chart for ERJ points out that the company has recorded 13.30% gains over the past six months. However, it is still -57.07% lower than its most recent low trading price.

If we look at the average trading volume of 2.46M shares, ERJ reached to a volume of 1840032 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about Embraer S.A. [ERJ]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for ERJ shares is $6.48 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on ERJ stock is a recommendation set at 3.10. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

Morgan Stanley have made an estimate for Embraer S.A. shares, keeping their opinion on the stock as Underweight, with their previous recommendation back on August 11, 2020. The new note on the price target was released on May 04, 2020, representing the official price target for Embraer S.A. stock.

The Average True Range (ATR) for Embraer S.A. is set at 0.32, with the Price to Sales ratio for ERJ stock in the period of the last 12 months amounting to 0.52. The Price to Book ratio for the last quarter was 0.07.

Trading performance analysis for ERJ stock

Embraer S.A. [ERJ] gain into the green zone at the end of the last week, gaining into a positive trend and gaining by 3.32. With this latest performance, ERJ shares gained by 37.92% in over the last four-week period, additionally plugging by 13.30% over the last 6 months – not to mention a drop of -63.22% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for ERJ stock in for the last two-week period is set at 69.96, with the RSI for the last a single of trading hit 71.19, and the three-weeks RSI is set at 65.08 for Embraer S.A. [ERJ]. The present Moving Average for the last 50 days of trading for this stock 4.88, while it was recorded at 6.09 for the last single week of trading, and 6.74 for the last 200 days.

Embraer S.A. [ERJ]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and Embraer S.A. [ERJ] shares currently have an operating margin of -4.31 and a Gross Margin at +13.67. Embraer S.A.’s Net Margin is presently recorded at -8.31.

Return on Total Capital for ERJ is now -2.04, given the latest momentum, and Return on Invested Capital for the company is -4.07. Return on Equity for this stock declined to -6.03, with Return on Assets sitting at -2.02. When it comes to the capital structure of this company, Embraer S.A. [ERJ] has a Total Debt to Total Equity ratio set at 3.71. Additionally, ERJ Total Debt to Total Capital is recorded at 3.58, with Total Debt to Total Assets ending up at 1.22. Long-Term Debt to Equity for the company is recorded at 3.14, with the Long-Term Debt to Total Capital now at 3.03.

Reflecting on the efficiency of the workforce at the company, Embraer S.A. [ERJ] managed to generate an average of -$46,459 per employee. Receivables Turnover for the company is 2.86 with a Total Asset Turnover recorded at a value of 0.24.

Embraer S.A. [ERJ]: An earnings per share (EPS) analysis

With the latest financial reports released by the company, Embraer S.A. posted -0.51/share EPS, while the average EPS was predicted by analysts to be reported at -0.12/share. When compared, the two values demonstrate that the company fail the estimates by a Surprise Factor of -325.00%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for ERJ. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Embraer S.A. go to 4.08%.

An analysis of insider ownership at Embraer S.A. [ERJ]

There are presently around $385 million, or 35.10% of ERJ stock, in the hands of institutional investors. The top three institutional holders of ERJ stocks are: BRANDES INVESTMENT PARTNERS, LP with ownership of 24,259,929, which is approximately -5.257% of the company’s market cap and around 12.40% of the total institutional ownership; HOTCHKIS & WILEY CAPITAL MANAGEMENT LLC, holding 5,266,440 shares of the stock with an approximate value of $32.76 million in ERJ stocks shares; and OLDFIELD PARTNERS LLP, currently with $26.57 million in ERJ stock with ownership of nearly -19.547% of the company’s market capitalization.

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Positions in Embraer S.A. stocks held by institutional investors increased at the end of November and at the time of the November reporting period, where 43 institutional holders increased their position in Embraer S.A. [NYSE:ERJ] by around 4,537,741 shares. Additionally, 79 investors decreased positions by around 12,655,867 shares, while 19 investors held positions by with 44,702,206 shares. The mentioned changes placed institutional holdings at 61,895,814 shares, according to the latest SEC report filing. ERJ stock had 10 new institutional investments in for a total of 230,373 shares, while 29 institutional investors sold positions of 5,281,156 shares during the same period.

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