Embraer S.A. (ERJ)

We are downgrading our recommendation on Embraer (ERJ - Analyst Report) from Neutral to Underperform. The international economic environment remains an issue, considering the company's exposure to the U.S. and Europe.

Moreover, the company's high concentration for some models, with primary focus on American airline companies, exposes it to considerable risks. However, lower oil prices compared to 2008 and the support of the Brazilian Government appear to be encouraging. We also remain optimistic about the strength in the company's aircraft family.

Nevertheless, the considerable strain on the Brazilian airport infrastructure will certainly impact the company's local sales.

Embraer S.A. (ERJ) : FULL ANALYST REPORT

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