Bear of the Day: Embraer SA - ADR
by Zacks Equity ResearchJanuary 17, 2013 | Comments : 0 Recommended this article: (0)
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Moreover, the highly competitive industry in which the company operates is forcing Embraer to incur high costs with an increase in the prices of fuel along with the possibility of order cancellations. Embraer reported a significant increase in EPADS from a year-ago, but the results also reflected a heavier tax burden, rising wages in Brazil, overt dependence on a few customers and a drop in demand for business jets.
Based on the above factors, we downgrade our recommendation on the stock from Neutral to Underperform. Our $25.00 target price, 9.0x 2013 EPADS, reflects this view.
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