Embraer’s ambitious plan to earn US$10 billion in 2030 – and analysts’ vision

A Embraer () wants to pocket up to US$10 billion in 2030, a big leap compared to the US$6.4 billion estimated for this year. Growth, says the company, will be driven by advances in operational efficiency, technology and innovation, and ESG (environmental, social and governance) practices. The projections were mentioned by CEO Francisco Gomes Neto at Investor Day 2024, held in New York, at the NYSE.

In the commercial aviation segment, Embraer highlighted competitive advantages that place it ahead of rivals such as Airbus and Boeing. The E2 model, for example, is lighter and less susceptible to problems in GTF engines, common in the competition, according to a Bradesco BBI report. Furthermore, the diversification of the customer base is expected to gain momentum, especially in Asia and the United States, where the E175-E1 remains in high demand due to regulatory limitations known as scope clauses.

Embraer also plans to deliver more than 300 units of the E175-E1 in the United States over the next 10 years, while targeting new opportunities in China and India. BBI highlights the approximately 25% lower cost per trip than E2 as a strategic differentiator to win the market.

The segment also presents optimistic prospects, according to analysts. They note that post-pandemic demand remains strong, with a new generation of younger customers seeking private jets.

Embraer’s defense and security division also shined at Investor Day. With production sold out by 2027 and an addressable market of 500 units for the C-390 Millennium, the company sees strong opportunities in future contracts, especially for NATO and the Air Force of the United States. The C-390’s advantage, which includes versatility and reduced operating costs, reinforces its global appeal.

In the services and support sector, Embraer wants to double the size of the unit by 2030. The proximity to customers and the strategic use of centers such as OGMA and Fort Worth, Texas, drive this expansion, according to strategists. At the same time, Eve Air Mobility is moving towards eVTOL (electric vertical take-off and landing vehicle) certification by 2027.

Bradesco BBI and Itaú BBA maintain positive recommendations for Embraer shareswith a target price of US$43 for the end of 2025, reinforcing the optimism surrounding the company. Despite the significant appreciation this year, Embraer shares remain attractive to analysts. The EV/Ebitda multiple – which represents the total value of a company with its earnings before interest, taxes, depreciation and amortization – of 8 times for 2025 is below the historical average and that of competitors such as Airbus and Boeing, according to Itaú BBA. This, combined with expected margin expansion and new orders, supports the optimistic outlook.

Backlog of US$ 22.7 billion and market expansion

Parallel to this, JP Morgan highlights that Embraer trades at a discount of around 30% compared to its peers, while the backlog (customer order book) of US$22.7 billion, the highest in the last nine years, and an ROIC (return on invested capital) above the cost of capital justify an improvement in valuation.

XP Investimentos emphasizes operational efficiency and projected growth, but maintained a neutral view due to the company’s high multiples. Despite this, both analyzes indicate that the results presented at Investor Day strengthen the perception that Embraer is well positioned to sustain its growth in the coming years.

BTG Pactual, on the other hand, highlights in a report that Embraer has excelled in managing its supply chain, minimizing the impacts of global restrictions. Analysts say the business aviation division, for example, has achieved record margins and revenue, supported by changes in customer demographics, while the Defense unit prepares for a 2024 of historic orders, driven by the performance of the C-390 Millennium freighter. .

For Santander, the potential expansion in the Asian market for regional jets and the strengthening of support services reinforce Embraer’s competitiveness. The bank reiterated its Outperform recommendation (above the market average), highlighting the favorable scenario for operating margins and growth sustainability.

UBS BB adopts conservative stance

While acknowledging Embraer’s strong momentum, , claiming that the market is pricing in overly optimistic scenarios, such as above-average commercial deliveries and margins higher than recent history. The bank also highlighted challenges in the defense segment, citing the difficulty of converting purchasing intentions into firm orders in the past, as seen with the C-390.

UBS BB also highlights Airbus’ competition in the regional jet segment, with the C-Series family, renamed A220, consolidating itself as a strong rival. Despite this, it raised the target price to R$46.50 per share, suggesting that, even in a conservative scenario, Embraer has potential for appreciation due to the consolidated growth in its business units.

Attractive Stocks

A (+142% in the year), with foreign investors showing greater appetite for the company’s thesis compared to locals. According to BTG, the exchange rate exposure and the favorable earnings cycle have been attractive for the global market, while in Brazil the price assessment is more conservative.

On Tuesday (19), after UBS BB downgraded its recommendation for the company from neutral to sale, the market reaction was immediate, with Embraer shares leading the ranking of biggest decliners in the Ibovespa index, reflecting investors’ fears. regarding the company’s prospects for the coming years. During the trading session, the company fell by more than 5%.

Today, however, the game has turned for the company. At 12:10 p.m., the Embraer it occupied second place in the ranking of the biggest rises on the Stock Exchange, rising 1.27% and quoted at R$55.17.