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Wolfe stays optimistic about the business but says the downgrade came as the stock had already hit its previous price target.
Embraer (ERJ) stock will likely gain retail attention on Monday after Wolfe Research downgraded the stock to ‘Peer Perform’ from ‘Outperform.’
According to The Fly, the brokerage has noted that the shares have gained 100% in a year on improving operating results, sustained positive free cash flow, and a significant backlog increase.
Wolfe stays optimistic about the business but says the downgrade came as the stock had already hit its previous price target.
The brokerage also says that President Donald Trump’s reciprocal tariffs, which will be effective from April 2, present a material risk, mainly if value-added tax rates are included.
Trump has named April 2 as the “Liberation Day” for the United States and plans to impose duties on countries if they have their tariffs on U.S. goods on that day.
Countries with other trade barriers, like value-added taxes, could also face new tariffs under the plan.
Brazil-based Embraer has production facilities across the globe. The company had posted a record backlog of $26.3 billion after the end of the fourth quarter.
Embraer recently got a $7 billion order from U.S.-based Flexjet for its executive jets, including a firm order of 182 aircraft and 30 options.
The company had forecast 2025 commercial aviation deliveries of between 77 and 85 aircraft and executive aviation deliveries of between 145 and 155 aircraft in February.
Embraer also projected 2025 revenue between $7 billion and $7.5 billion.
Retail sentiment on Stocktwits was in the ‘bullish’ (66/100) territory till Friday, while retail chatter was ‘normal.’
Embraer shares have gained 44.6% year-to-date (YTD).
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