Embraer is Friday's IBD Stock Of The Day for Friday as shares try to break out past a buy point after some Trump tariff turbulence. The Brazilian jet maker is planning a major announcement next week about a new U.S. initiative.
Brazil-based Embraer, which makes a range of commercial, business and military aircraft and parts, is coming off its mixed Q2 report from Aug. 5.
Embraer earnings fell to 43 cents per share, slightly below estimates. Revenue jumped nearly 22% to $1.82 billion, edging past views.
The manufacturer maintained its 2025 guidance for 77-85 commercial aviation deliveries. Embraer expects executive aviation deliveries to range between 145 and 155 aircraft.
The company forecasts full-year revenues range from $7 billion to $7.5 billion, while analysts polled by FactSet expect $7.43 billion.
Tariff Negotiations And U.S. Market Plans
Embraer has been able to avoid the full brunt of tariffs. CEO Francisco Neto in the Aug. 5 investor call noted that Embraer faces a 10% tariff on civil aviation products, sparing it from the effective 50% duty on Brazil imposed at the end of July. Neto said that the 10% tariffs are already included in Embraer's outlook for the year, and is in discussions to negotiate that down to zero.
American carriers represent about 45% of Embraer's commercial plane sales, and about 70% of its private jet sales, according to reports.
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Meanwhile, the company is planning to invest up to $1 billion in the U.S. to counter potential tariffs, Bloomberg reported in August. Embraer plans a $500 million investment in its existing plants in Texas and Florida over the next five years, as well as considering a conditional $500 million investment in a new U.S. assembly line for the KC-390 military transport jet.
However, a lower U.S. court recently ruled that President Donald Trump's tariffs are unconstitutional, which leaves the full potential impact of the duties up in the air.
Elsewhere, Embraer on Sept. 10 is expected to make a major announcement in Washington, D.C. about its next steps in the U.S. aviation market, Reuters reported. The company described the announcement as "the first of its kind ever made in the United States," but did not include further details. Sources told Reuters that it does not involve Embraer's industrial footprint and that the company has no immediate plans of launching a new jet model.
The meeting coincides with a major gathering of aerospace leaders in Washington, including the CEO of Airbus.
Paris Air Show Wins
Embraer during the Paris Air Show in June finalized a firm order with All Nippon Airways for 15 planes from Embraer's E-Jet E2 family as part of a fleet renewal plan, according to SimpleFlying.
The company also secured a firm order from SkyWest for 60 aircraft, with purchase rights for an additional 50 aircraft. Deliveries are set to begin in 2027. The list price for the firm order of 60 jets is $3.6 billion. SkyWest is the largest owner and operator of the E175 plane worldwide.
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Southern Africa-based Airlink plans to lease 10 new Embraer planes from Fort Lauderdale-based Azorra, which Embraer will deliver starting this year through 2027.
Embraer Stock Shakes Off Tariff Turbulence
Embraer trades in American Depositary Receipts under the ticker symbol ERJ.
ERJ shares swung 2.7% higher Friday, attempting to break out above a 60.42 buy point for an eight-week cup-with-handle base. The current buy zone, which extends 5% beyond the buy point, stretches to 63.44.
Shares rebounded from the 50-day line on Tuesday.
The current base is awkward due to Trump tariff swings. Shares dived in July after Trump threatened a shock 50% tariff on imports from Brazil. But shares vaulted on July 30 as Embraer was largely spared from the actual duties.
Embraer has rallied about 65% so far this year, and is nearing its record high of 61.65 from July 7.
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