On May 23, Zacks Investment Research upgraded
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Embraer SA reported solid result in the first quarter of 2014 on
the back of strong performance by both the Defense & Security
and Executive Jets segments. The company's diversified product
portfolio has also helped it to maintain a strong position in the
The company's first-quarter 2014 earnings surpassed the Zacks
Consensus Estimate by 54.5%. The company registered a positive
surprise in 3 out of the last 4 quarters with an average beat of
In the first quarter of 2014, the company's sales from the
Executive and Defense & Security segment increased by 52.5% and
56.7% year over year, respectively. The company has marginally
increased its 2014 revenue guidance to a range of $6.0 billion to
$6.5 billion from 2013 levels,
The company's steady program execution capability has clinched a
strong order in the first quarter of 2014. Embraer received a
steady flow of orders in the first quarter, with a backlog of $19.2
billion, up 5.5% sequentially. The company's firm order backlog
reached its highest level since the second quarter of 2009, mainly
due to orders received in the Commercial Aviation segment.
Recently, the Brazilian aerospace major secured a $7.2 billion
reals ($3.26 billion) contract from Brazil's Air Force to provide
28 KC-390 cargo jets. This deal has the potential to steal the
Lockheed Martin Corp.'
) C-130 Hercules series. KC-390's ability to execute various
missions ranging from cargo and troop transport, cargo deployment,
aerial refueling, search and rescue to combating forest fires and
lower operating cost will likely make it popular in both the
domestic and international market.
The company is also committed to invest in its research and product
development program. For 2014, the company's total expenditure
comprises $0.08 billion of research and $0.3 billion of product
Other Stocks to Consider
Other stocks worth considering in the same industry include
The Boeing Company
Huntington Ingalls Industries, Inc.
), both carrying a Zacks Rank #2 (Buy).
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BOEING CO (BA): Free Stock Analysis Report
EMBRAER AIR-ADR (ERJ): Free Stock Analysis
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LOCKHEED MARTIN (LMT): Free Stock Analysis
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