巴西航空工业公司（ERJ US）：上调至买入评级：前景乐观

EquitiesAerospace & Defence Upgrade toBuy:Positive outlook Brazil ◆Strong deliveries in Executive and Defense, and EVE’s firstfull-scale prototype flightto embarkin2025 UPGRADE TO BUY TARGET PRICE(USD)PREVIOUS TARGET(USD)57.0045.00SHARE PRICE(USD)UPSIDE/DOWNSIDE46.07+23.7%(as of02 Jun 2025) ◆Likely limited impact from the new US tariffs ◆Upgrade to Buy from Hold; raiseTP to USD57from USD45onhigher EVE value andlower DCF WACC Positive outlookfor upcomingquarters:Withan all-time highbacklogofUSD26.4bnat end-Q1,Embraeroffers strongrevenue generation inthecoming quarters, which issupported by accelerated efforts to remove output bottlenecks and spread productionmore evenly over quarters. We expect 2025 to be markedby strong deliveries ofexecutive jets (+28% y-o-y in 1Q25) and defense products (KC-390 and A-29 SuperTucanos).Asolid delivery performanceis likelyfor2Q25as the company has 9 aircraftready to sell (finished goods),equating to20% of total46deliverieslast yearinQ2.TheParis Air Show in mid-Junemaybringfresh headlinesin terms ofnewfirm orders,and EVEis at a critical point with itsfirst full-scale prototype flighttest pending(scheduledfor mid-2025),a potential positive catalyst if successful. Limited impact from US tariffs:Managementestimatesthe new US tariffsforimports (10% for Brazil),which took effect in early April,willhaveac90bpimpact onEBITmargins, whichitexpectsto curb further via mitigating action. The tariffsimpacttheExecutive and Services divisions;the formerdue to a large part of the assemblylinesbeinginBrazil,and the latter due toimportsof spare parts for the maintenance,repair, and overhaul (MRO) facilities located in the US.In order to mitigate theeffects,thecompanyaims to increasethe UScontent in the jets, andfocus more oncost-cutting initiatives.Hence, management left 2025 guidance unchanged after theQ1 results.The company also confirmed that Commercial is not impacted by thetariffs.Our 2025 adjusted EBIT marginforecast forExecutiveis11.5%(unchanged)and forServices & Supportitis17.0% (from 17.2%).We raise the margin forCommercialto 3.0% (from 2.5%)and leave Defense unchanged at 7.0%.Ourconsolidatedadjusted EBITmargin remains unchanged at 7.9%as we do notforesee further impacts and the production leveling plan is showing early signs ofimprovement at the Commercial division. Cenk Orcan*Aviation & Industrials AnalystHSBCYatirim Menkul Degerler A.S.cenkorcan@hsbc.com.tr+90 212 376 46 14 Jorge Hernandez*Analyst, Aviation and IndustrialsHSBC Mexico, S.A., Institucion de Banca Multiple, GrupoFinanciero HSBCjorge.hernandezhe@hsbc.com.mx+52 55 4760 3113 Upgrade to BuywithTPofUSD57.00from USD45.00:Our forecast revisionsincorporate 1Q25 results as well as EVE’s results.We maintain our 2025 estimatesat the high-end ofthe company guidance forrevenues (USD7.5bn, vs guidanceUSD7.0-7.5bn) andat the mid-point foradjustedEBIT margin (7.9%vs 7.5-8.3%).OurnewSOTP based target price isUSD57.00 (fromUSD45.00),driven by a lowerDCFWACC(12.6% from 14.2% on lower stock beta)and higher EVE stake value(linked to EVE’s market value).Our new TPimpliesc24% upside and we thereforeupgrade to Buy fromHold.The stock trades at 2025e/26e EV/EBITDA of 10.8x/8.1x,vsits pastfive-year average one-year forward multiple of 8.7x. * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and isnot registered/ qualified pursuant to FINRA regulations HSBC Global Research Podcasts Listen to our insights Find out more Issuer of report:HSBC Yatirim Menkul DegerlerAS Disclosures & DisclaimerThis report must be read with the disclosures and the analystcertifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at:https://www.research.hsbc.com Financials & valuation:Embraer Embraer in charts Source: Company data. Leverage: net debt w/o EVE or incl EVE / Adj. EBITDA LTM Commercial Aviation CommercialAviationregistered flattish growthin 1Q25 inbothaircraft deliveries andthetop-lineas aresultof bottlenecks at the production line, mainly delays related to fuselage parts andspare engines, whichcontinue to improve,according to management. Nonetheless, thecompany was unable to delivertwoaircraft during the quarter due to paperwork delays with thecustomers;otherwise,deliveries would have increased 29% y-o-y to 9 aircraft. Furthermore, thecompanyreceivedan order for 15 E190-E2sfromANA that will be included inthebacklog in2H25.Looking forward, we expect to see more visible improvements on the production levelingas 1Q25 showed early signs of progression. Regarding the US tariffs, the company does notforeseea direct impact as the aircraft aredirectly imported by the airlines,transferring theadditional10% tariff cost to the customer. Executive Aviation TheExecutivelinemadea strong starttothe yearthanksto continued progressintheproduction levelling plan,resulting in 28% more jetsdeliveredy-o-yin the quarter(23jetsvs18in 1Q24). This division is showing themost visible