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Investing.com - Wolfe Research upgraded Embraer (NYSE:ERJ) from Peerperform to Outperform on Thursday, setting a price target of $64.00. The $10 billion market cap aerospace manufacturer currently maintains a "GREAT" financial health score according to InvestingPro data.
The Brazilian aircraft manufacturer’s shares have risen 4% since Wolfe Research’s previous downgrade in March, underperforming compared to the broader market’s approximately 12% gain and the average aerospace stock’s 34% increase during the same period.
Year-to-date, Embraer stock has climbed 50%, significantly outpacing the S&P 500’s 8% gain, with Wolfe Research projecting potential for an additional 15% upside to their year-end 2025 price target.
The $64 price target is based on a multiple of 12 times Wolfe Research’s unchanged 2026 EBITDA estimate of $920 million, which sits approximately 9% below consensus estimates.
Wolfe Research noted Embraer shares are currently trading at approximately 11 times their 2026 estimates, assuming no value for the company’s EVE stake, which represents a valuation well above pre-COVID levels of 5-8 times but remains at the lower end of the broader aerospace sector’s range of 8-30 times.
In other recent news, Embraer reported a significant increase in aircraft deliveries, with 61 aircraft delivered in the second quarter of 2025, marking a 30% rise from the previous year. This growth was particularly notable in their Executive Aviation and Defense segments. Additionally, Scandinavian Airlines (SAS) placed a record order for up to 55 Embraer E195-E2 jets, valued at approximately $4 billion, marking SAS’s largest direct jet order since 1996. The first deliveries from this order are expected to begin in late 2027.
In terms of analyst perspectives, BofA Securities raised its price target for Embraer to $65 from $55, maintaining a Buy rating due to the company’s robust first-quarter performance. Morgan Stanley (NYSE:MS) also reiterated an Overweight rating with a $65 price target, despite new US tariffs affecting Embraer’s Executive Aviation segment. These tariffs, set to take effect in August 2025, are expected to have limited impact on the company’s other business areas.
These developments highlight Embraer’s ongoing growth and strategic partnerships, positioning it for future opportunities in the aviation sector.
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