Back to top

Analyst Blog

Embraer S.A. (ERJ - Analyst Report) entered into a contract with Republic Airways Holdings Inc. (RJET - Snapshot Report) involving the sale of 47 EMBRAER 175 jets. The jets will be used by Republic Airlines, a subsidiary of Republic Airways, operated under the American Eagle brand. The deal includes an option of additional 47 jets, subsequent to which the contract will be valued at $4 billion. The first jet is scheduled to be delivered by mid 2013.

The company is the leader in 70-120 seat jets segment and has 60 airlines in 40 countries as its customers. With a target to expand further, Embraer has included many new features to its existing E-Jets like addition of new wingtips and increase of fuel efficiency to the tune of 5%.

Republic will be the first to receive the enhanced E175, with an existing Embraer fleet of 132 E-Jets, which will grow further to 179 with this contract.   

The deal is expected to revive earnings expectations for the company, which came down after the company lost a major contract from Delta Airlines to its rival, Bombardier Inc., a Canadian company. The stock price grew by a whopping 9.1% after the announcement of the contract, trading at $31.16 per share. The contract is subject to regulatory approvals, which are to be granted in the first quarter of 2013.

Embraer is expected to release its fourth quarter 2012 results on Mar 18, 2013. With a Zacks Rank #5 (Strong Sell) and a Zacks Earnings ESP of -9.8%, it is most likely that the company will miss its Zacks Consensus Estimate of 82 cents for the quarter.

Other stocks to watch out for in the industry are Erickson Air-Crane Inc. (EAC - Snapshot Report) and Huntington Ingalls Industries Inc. (HII - Snapshot Report). These companies hold a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
BANCO DO BR… BDORY 14.55 +4.30%
ERBA DIAGNO… ERB 3.69 +3.94%
AIR INDUSTR… AIRI 9.90 +3.23%
WEATHERFORD… WFT 23.63 +3.05%
EQT MIDSTRE… EQM 97.81 +3.03%