{"id":20004,"date":"2020-06-14T13:45:44","date_gmt":"2020-06-14T17:45:44","guid":{"rendered":"https:\/\/www.pgmcapital.com\/?p=20004"},"modified":"2020-06-14T13:45:47","modified_gmt":"2020-06-14T17:45:47","slug":"why-investing-in-embraer-s-a-can-be-lucrative-for-growth-investors","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/why-investing-in-embraer-s-a-can-be-lucrative-for-growth-investors\/","title":{"rendered":"Why Investing in Embraer S.A., can be lucrative for Growth Investors."},"content":{"rendered":"\n<p>Dear<strong>&nbsp;PGM Capital<\/strong>&nbsp;Blog readers,<\/p>\n\n\n\n<p>In this weekend\u2019s blog article, we want to take the opportunity to discuss with you, why investing in shares of Embraer S.A. \u2013 at current share price level \u2013 can be lucrative for growth investors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">INTRODUCTION:<\/h3>\n\n\n\n<p><strong>Embraer S.A.<\/strong>\u00a0(NYSE: ERJ) is a Brazilian\u00a0aerospace\u00a0conglomerate\u00a0that designs, develops, manufactures, and sells aircrafts and systems in Brazil, North America, Latin America, the Asia Pacific, Brazil, Europe, and internationally.\u00a0<\/p>\n\n\n\n<p>Founded in 1969 in\u00a0S\u00e3o Jos\u00e9 dos Campos,\u00a0S\u00e3o Paulo, it operates through Defense and Security; Executive Jets; Service &amp; Support; and Other segments. <\/p>\n\n\n\n<p>The company is the third largest producer of&nbsp;civil aircraft, after&nbsp;Boeing&nbsp;and&nbsp;Airbus.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/ir-institutional-presentation-november-2013-9-638.jpg\" alt=\"\" class=\"wp-image-20010\" width=\"700\" srcset=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/ir-institutional-presentation-november-2013-9-638.jpg 634w, https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/ir-institutional-presentation-november-2013-9-638-300x167.jpg 300w\" sizes=\"(max-width: 634px) 100vw, 634px\" \/><\/figure><\/div>\n\n\n\n<p>By December 2018, Embraer claimed to lead the sub 150 seat&nbsp;jetliner&nbsp;market with 100 operators of the&nbsp;<a href=\"https:\/\/en.wikipedia.org\/wiki\/Embraer_ERJ_family\" target=\"_blank\" rel=\"noreferrer noopener\">ERJ<\/a>&nbsp;and&nbsp;<a href=\"https:\/\/en.wikipedia.org\/wiki\/Embraer_E-Jet_family\" target=\"_blank\" rel=\"noreferrer noopener\">E-Jet<\/a>&nbsp;families as follows:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Embraer ERJ family:<ul><li>Embraer ERJ 135 (37 passengers)<\/li><li>Embraer ERJ 140 (44 passengers)<\/li><li>Embraer ERJ 145 (50 passengers)<\/li><\/ul><\/li><li>Embraer E-Jet family:<ul><li>Embraer E170 (66\u201378 passengers)<\/li><li>Embraer E175 (76\u201388 passengers)<\/li><li>Embraer E190 (96\u2013114 passengers)<\/li><li>Embraer E195 (100\u2013124 passengers)<\/li><\/ul><\/li><li>Embraer E-Jet E2 family:<ul><li>Embraer E175-E2 (80\u201390 passengers)<\/li><li>Embraer E190-E2 (97\u2013114 passengers)<\/li><li>Embraer E195-E2 (120\u2013146 passengers)<\/li><\/ul><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">THE BOEING-EMBRAER JOINT VENTURE:<\/h3>\n\n\n\n<p>Boeing Brasil\u2013Commercial\u00a0was a negotiated\u00a0joint venture\u00a0between\u00a0Boeing\u00a0and\u00a0Embraer\u00a0to design, build, and sell\u00a0commercial airliners\u00a0worldwide. <\/p>\n\n\n\n<p>The partnership was established on February 2019, after Boeing agreed to purchase an 80% stake in Embraer&#8217;s commercial aircraft division. <\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/c1_3614165.jpg\" alt=\"\" class=\"wp-image-20013\" width=\"700\" srcset=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/c1_3614165.jpg 768w, https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/c1_3614165-300x225.jpg 300w, https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/c1_3614165-285x214.jpg 285w\" sizes=\"(max-width: 768px) 100vw, 768px\" \/><\/figure><\/div>\n\n\n\n<p>The deal was approved by Embraer&#8217;s shareholders and was expected to close in June 2020 pending\u00a0antitrust\u00a0reviews, but in April 2020 Boeing terminated the joint venture deal due to\u00a0the impact of the 2019\u20132020 coronavirus pandemic on aviation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">PGM CAPITAL ANALYSIS &amp; COMMENTS:<\/h3>\n\n\n\n<p><strong>Embraer<\/strong> has been a surprisingly resilient competitor with the larger players. While other competitors in the regional jet space, such as Canada\u2019s&nbsp;<strong>Bombardier&nbsp;<\/strong>have struggled mightily, Embraer has more than held its own.<\/p>\n\n\n\n<p>In recent years, however, Embraer has seen a downturn in profits. A soft local economy in Brazil and Latin America has not helped matters. <\/p>\n\n\n\n<p>Yet, ERJ has a great product, and it should be in the sweet spot going forward. Emerging markets are growing their aviation markets much more quickly than developed markets, and 50-100 seat airplanes are ideal for many of these newly developing routes and carriers.<\/p>\n\n\n\n<p>The market for regional jet aircraft is projected to grow significantly in coming years. According to some analysts between 2019 and 2038, an estimated 10,550 new commercial aircraft with up to 130 seats will be delivered, including 8,230 regional jets along with 2300 turboprops.<\/p>\n\n\n\n<p>One of the most comfortable of the class is the new Embraer E195-E2, which is 136 feet in length, with a maximum takeoff weight of 135,000 pounds.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/E195_E2_model.png\" alt=\"\" class=\"wp-image-20018\" width=\"700\" srcset=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/E195_E2_model.png 940w, https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/E195_E2_model-300x102.png 300w, https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/E195_E2_model-768x262.png 768w\" sizes=\"(max-width: 940px) 100vw, 940px\" \/><\/figure>\n\n\n\n<p>The E195-E2 is the largest commercial aircraft Embraer has ever made. It was rolled out to its first launch customer, Brazilian airline&nbsp;Azul<strong>,&nbsp;<\/strong>in September, 2019.<\/p>\n\n\n\n<p>The E195-E2, like its most direct competitor the Airbus A220, is positioned just below the smallest Boeing 737 or Airbus A320 models. Nonetheless, the E195-E2 can fly up to 2,600 nautical miles at speeds up to Mach .82 (629 mph) and can take off from a relatively modest 6,500-foot runway.<\/p>\n\n\n\n<p>Due to the COVID-19 scare, shares of the company are down 64 percent YTD as can be seen from below chart.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/Screen-Shot-2020-06-13-at-1.47.27-PM-1024x347.png\" alt=\"\" class=\"wp-image-20020\" width=\"900\" srcset=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/Screen-Shot-2020-06-13-at-1.47.27-PM-1024x347.png 1024w, https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/Screen-Shot-2020-06-13-at-1.47.27-PM-300x102.png 300w, https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/Screen-Shot-2020-06-13-at-1.47.27-PM-768x261.png 768w, https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/Screen-Shot-2020-06-13-at-1.47.27-PM-1536x521.png 1536w, https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2020\/06\/Screen-Shot-2020-06-13-at-1.47.27-PM-2048x695.png 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n\n<p>Based on the company&#8217;s fundamentals and very attractive share price, \u2013 due to the COVID-19 \u2013 we initiated our coverage on the shares of Embraer S.A, with a &nbsp;<strong>STRONG BUY<\/strong>&nbsp;rating. <\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Disclosure:<\/h4>\n\n\n\n<p>We have recently bought shares of Embraer for our personal portfolio.<\/p>\n\n\n\n<p>PGM Capital is at your service as your, Professional, Trustworthy and Dedicated, Financial Advisor and Asset Management.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2019\/09\/When-you-succeed-we-succeed-transparant-1.png\" alt=\"\" width=\"800\"\/><\/figure><\/div>\n\n\n\n<p>Last but not least, before taking any investment decision, always take your investment horizon and risk tolerance into consideration. Keep in mind that share prices do not move in a straight line. Past Performance Is Not Indicative Of Future Results.<\/p>\n\n\n\n<p>Yours sincerely,<\/p>\n\n\n\n<figure class=\"wp-block-image is-resized\"><img decoding=\"async\" src=\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2015\/06\/eric.jpg\" alt=\"\" width=\"103\"\/><\/figure>\n\n\n\n<p>Eric Panneflek<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dear&nbsp;PGM Capital&nbsp;Blog readers, In this weekend\u2019s blog article, we want to take the opportunity to discuss with you, why investing in shares of Embraer S.A. \u2013 at current share price level \u2013 can be lucrative for growth investors. INTRODUCTION: Embraer S.A.\u00a0(NYSE: ERJ) is a Brazilian\u00a0aerospace\u00a0conglomerate\u00a0that designs, develops, manufactures, and sells aircrafts and systems in Brazil,<a href=\"https:\/\/www.pgmcapital.com\/nl\/why-investing-in-embraer-s-a-can-be-lucrative-for-growth-investors\/\">[&#8230;]<\/a><\/p>\n","protected":false},"author":2,"featured_media":20012,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[],"class_list":["post-20004","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pgm-capital-blog"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/20004","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=20004"}],"version-history":[{"count":16,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/20004\/revisions"}],"predecessor-version":[{"id":20027,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/20004\/revisions\/20027"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media\/20012"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=20004"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=20004"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=20004"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}