Morgan Stanley slashes price target on Embraer S.A. [ERJ] – find out why.

Embraer S.A. [NYSE: ERJ] stock went on an upward path that rose over 6.57% on Thursday, amounting to a one-week price increase of more than 9.96%. The company report on May 13, 2021 that EMBRAER S.A.: SkyWest Airlines Orders Eight New E175 Aircraft for Operation with Alaska Airlines.

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Embraer (NYSE: ERJ; B3: EMBR3) has agreed to the sale of eight new E175 jets to SkyWest, Inc. (NASDAQ: SKYW) for operation with Alaska Airlines, adding to the 32 SkyWest E175 jets SkyWest already flies for Alaska. The E175 aircraft will fly exclusively with Alaska Airlines under a Capacity Purchase Agreement (CPA). The value of the contract, which will be included in Embraer’s second-quarter backlog, is USD 399.2 million, based on list price.

Alaska Airlines, a new member of the oneworld Alliance, currently has 62 Embraer E175 jets in their fleet, operated by Horizon Air and SkyWest Airlines. The 76-seat aircraft will be delivered in Alaska’s livery and three-class configuration, starting in 2022.

Over the last 12 months, ERJ stock rose by 160.04%. The one-year Embraer S.A. stock forecast points to a potential downside of -49.5. The average equity rating for ERJ stock is currently 3.10, trading closer to a bullish pattern in the stock market.

The market cap for the stock reached $2.45 billion, with 184.04 million shares outstanding and 175.18 million shares in the current float. Compared to the average trading volume of 3.80M shares, ERJ stock reached a trading volume of 4907129 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Guru’s Opinion on 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 $9.01 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 0.57, with the Price to Sales ratio for ERJ stock in the period of the last 12 months amounting to 0.66. The Price to Book ratio for the last quarter was 0.89, with the Price to Cash per share for the same quarter was set at 14.59.

ERJ Stock Performance Analysis:

Embraer S.A. [ERJ] gain into the green zone at the end of the last week, gaining into a positive trend and gaining by 9.96. With this latest performance, ERJ shares gained by 14.83% in over the last four-week period, additionally plugging by 115.18% over the last 6 months – not to mention a rise of 160.04% 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 67.32, with the RSI for the last a single of trading hit 70.51, and the three-weeks RSI is set at 65.50 for Embraer S.A. [ERJ]. The present Moving Average for the last 50 days of trading for this stock 11.27, while it was recorded at 12.86 for the last single week of trading, and 7.53 for the last 200 days.

Insight into Embraer S.A. Fundamentals:

Operating Margin for any stock indicates how profitable investing would be, and Embraer S.A. [ERJ] shares currently have an operating margin of -3.64 and a Gross Margin at +12.25. Embraer S.A.’s Net Margin is presently recorded at -18.41.

Return on Total Capital for ERJ is now -2.66, given the latest momentum, and Return on Invested Capital for the company is -14.28. Return on Equity for this stock declined to -25.14, with Return on Assets sitting at -7.42. When it comes to the capital structure of this company, Embraer S.A. [ERJ] has a Total Debt to Total Equity ratio set at 159.67. Additionally, ERJ Total Debt to Total Capital is recorded at 61.49, with Total Debt to Total Assets ending up at 42.78. Long-Term Debt to Equity for the company is recorded at 145.98, with the Long-Term Debt to Total Capital now at 56.22.

Reflecting on the efficiency of the workforce at the company, Embraer S.A. [ERJ] managed to generate an average of -$230,937 per employee. Receivables Turnover for the company is 5.25 with a Total Asset Turnover recorded at a value of 0.40.Embraer S.A.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.50 and a Current Ratio set at 2.50.

ERJ Stock EPS

With the latest financial reports released by the company, Embraer S.A. posted -0.56/share EPS, while the average EPS was predicted by analysts to be reported at -0.33/share. When compared, the two values demonstrate that the company fail the estimates by a Surprise Factor of -69.70%. 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%.

Embraer S.A. [ERJ] Insider Position Details

There are presently around $1,006 million, or 45.40% 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 24,501,183, which is approximately -0.569% of the company’s market cap and around 12.40% of the total institutional ownership; MILLENNIUM MANAGEMENT LLC, holding 5,267,848 shares of the stock with an approximate value of $70.96 million in ERJ stocks shares; and OLDFIELD PARTNERS LLP, currently with $63.38 million in ERJ stock with ownership of nearly -10.921% 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 April and at the time of the April reporting period, where 86 institutional holders increased their position in Embraer S.A. [NYSE:ERJ] by around 21,311,653 shares. Additionally, 47 investors decreased positions by around 8,930,919 shares, while 11 investors held positions by with 44,453,610 shares. The mentioned changes placed institutional holdings at 74,696,182 shares, according to the latest SEC report filing. ERJ stock had 28 new institutional investments in for a total of 6,264,554 shares, while 13 institutional investors sold positions of 833,834 shares during the same period.

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