analysts of Santander see a buying opportunity for ADRs (American Depositary Receipts, share certificates issued in the United States and backed by securities issued by foreign companies) of embraer (ERJ), after the accumulated decline since mid-April.
In the bank’s assessment, there are two triggers that can boost stocks in the short term:
- potential order announcements at the Paris Air Show, June 19-25; It is
- a strong performance in the results of the second quarter of 2023, mainly supported by an important resumption in deliveries of aircraft and positive free cash flow generation.
From a medium-term perspective, however, Santander sees limited room for positive surprises in the guidance of deliveries for 2023.
Santander projects a year-over-year expansion of approximately 20% for Embraer’s adjusted Ebitda in 2023 (excluding expenses related to Eve).
For 2024, analysts project a continuation of this year’s trends, in addition to further ramp-up of deliveries and margin recovery in the commercial segment. The services division should also present an expansion in revenues, benefiting from the ramp-up of the partnership with Pratt & Whitney.
Santander has an “outperform” recommendation (expected performance above the market average, equivalent to “buy”), with a target price of US$ 28, which represents an appreciation potential of approximately 79% compared to the last closing date.
Source: Moneytimes
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