UPDATE: Credit Suisse Upgrades Embraer SA to Neutral, Raises PT as Operational Headwinds are Fully Priced In

In a report published Thursday, Credit Suisse analyst Bruno Savaris upgraded the rating on

from Underperform to Neutral, and raised the price target from $29.00 to $38.00. In the report, Credit Suisse noted, “Upgrading Embraer to NEUTRAL Rating (USD 38/ADS, 17% upside). After (i) marking to market ERJ's 3Q14 results and 4Q14 deliveries; and (ii) accounting for a ~10% weaker BRL, reaching BRLUSD 2.8 by 2015YE, we are increasing ERJ's 2015 EPS estimate by 23%, to USD 2.38, and its target price to USD 38/ADS 2015YE (from USD 29/ADS 2014YE), which yields 17% upside potential. Looking at multiples, Embraer would be trading at ~14x 2015 P/E, a ~9% discount to both its historical level and global peers. At this point, considering more reasonable valuation levels and ERJ's anti-cyclical profile, we are less pessimistic on the thesis. Thus, we upgrade it to NEUTRAL.” Embraer SA closed on Wednesday at $32.55.