November 7, 2024
Top 10 Stock Embraer Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Embraer – Top 10 Stock in Bolsa de Valores-Mercadorias | BOVESPA
Embraer is listed as a top 10 stock on November 07, 2024 in the market index BOVESPA because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 92 (top 92% performer), Obermatt assesses an overall strong buy recommendation for Embraer on November 07, 2024.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Embraer Strong Buy
| 360 METRICS | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 89 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 35 |
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| SENTIMENT | ||||||||
| SENTIMENT | 48 |
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| 360° VIEW | ||||||||
| 360° VIEW | 92 |
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ANALYSIS: With an Obermatt 360° View of 92 (better than 92% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Embraer are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Embraer. The consolidated Value Rank has an attractive rank of 89, which means that the share price of Embraer is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 89% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 97, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 48. Professional investors are more confident in 52% other stocks. Worryingly, the company has risky financing, with a Safety rank of 35. This means 65% of comparable companies have a safer financing structure than Embraer. ...read more
RECOMMENDATION: With a consolidated 360° View of 92, Embraer is better positioned than 92% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 89 and the Growth Rank above-average at 97, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 48. In addition, the company financing structure is on the riskier side (Safety Rank of 35). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Embraer only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 48 (better than 48% compared with alternatives), overall professional sentiment and engagement for the stock Embraer is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Embraer. Analyst Opinions are at a rank of 48 (worse than 52% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 50, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Embraer. More encouragingly, the Professional Investors rank is 72, which means that professional investors hold more stock in this company than in 72% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 23, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 77% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 48 (less encouraging than 52% compared with investment alternatives), Embraer has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Embraer. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Embraer Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 89 (better than 89% compared with alternatives) for 2024, Embraer shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Embraer. Price-to-Sales is 79 which means that the stock price compared with what market professionals expect for future sales is lower than for 79% of comparable companies, indicating a good value for Embraer's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 81% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 73. Compared with other companies in the same industry, dividend yields of Embraer are expected to be higher than for 79% of all competitors (a Dividend Yield rank of 79). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 89, is a buy recommendation based on Embraer's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Embraer based on its detailed value metrics.
Growth Strategy: Embraer Growth Momentum high
| GROWTH METRICS | November 7, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 68 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 100 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 32 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 99 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 97 |
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ANALYSIS: With an Obermatt Growth Rank of 97 (better than 97% compared with alternatives) for 2024, Embraer shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Embraer. Sales Growth has a rank of 68 which means that currently, professionals expect the company to grow more than 68% of its competitors. Both Profit Growth, with a rank of 100, and Stock Returns, with a rank of 99, are also above average. But Capital Growth only has a rank of 32, which means that, currently, professionals expect the company to grow its invested capital less than 68% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 97, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Embraer Debt Financing Safety below-average
| SAFETY METRICS | November 7, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 24 |
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| REFINANCING | ||||||||
| REFINANCING | 81 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 20 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 35 |
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ANALYSIS: With an Obermatt Safety Rank of 35 (better than 35% compared with alternatives), the company Embraer has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Embraer is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Embraer and the other two below average. Refinancing is at 81, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 81% of its competitors. But Leverage is high with a rank of 24, meaning the company has an above-average debt-to-equity ratio. It has more debt than 76% of its competitors. Liquidity is also on the riskier side with a rank of 20, meaning the company generates less profit to service its debt than 80% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 35 (worse than 65% compared with alternatives), Embraer has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Embraer are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Embraer Top Financial Performance
| COMBINED PERFORMANCE | November 7, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 89 |
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| GROWTH | ||||||||
| GROWTH | 97 |
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| SAFETY | ||||||||
| SAFETY | 20 |
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| COMBINED | ||||||||
| COMBINED | 99 |
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ANALYSIS: With an Obermatt Combined Rank of 99 (better than 99% compared with investment alternatives), Embraer (Aerospace & Defense, Brazil) shares have much better financial characteristics than comparable stocks. Shares of Embraer are a good value (attractively priced) with a consolidated Value Rank of 89 (better than 89% of alternatives), show above-average growth (Growth Rank of 97) but are riskily financed (Safety Rank of 35), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 99, is a strong buy recommendation based on Embraer's financial characteristics. As the company Embraer's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 89) and above-average growth (Obermatt Growth Rank of 97), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 35) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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