UPDATE: JP Morgan Downgrades Embraer SA to Underweight on Tough Outlook for E-Jets
JP Morgan downgraded Embraer-Empresa Brasileira de Aeronautica (NYSE: ERJ) from Neutral to Underweight and lowered the price target from $31.00 to $25.00.
JP Morgan said, "We are downgrading Embraer to UW from N because we believe the stock does not fully account for a decline in commercial deliveries. We are lowering our 2014 E-Jet delivery estimate to 60 from 80, and we see potential for both upside and downside to this estimate. As each delivery accounts for ~3 cents of EPADS, this represents a 60 cent hit in 2014. We are also lowering margin estimates due to concerns about the profitability of early Legacy 500 and 450 business jet deliveries and a more cautious outlook for E-Jet pricing."
Embraer SA closed at $28.35 on Monday.
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