Embraer S.A. ERJ recently clinched a contract from ANA Holdings Inc. for delivering 15 of its E190-E2 small narrowbody aircraft, with options for an additional five aircraft. These jet deliveries are expected to start in 2028.

The aforementioned orders for Embraer’s E190-E2 aircraft should boost the company’s future revenue stream and bolster its profitability.

Significance of Embraer’s E190-E2 Jets
 

The E190-E2 is considered to be one of the major fuel-efficient single-aisle aircraft, with the capacity to reduce emissions by about 25%. Moreover, with this aircraft being certified to fly with blends of up to 50% sustainable aviation fuel (SAF), E190-E2 is a desirable choice for airlines looking for jets with low carbon emissions and fuel burn.  It also provides lower noise, offering better comfort to its passengers.

Due to such remarkable features, Embraer must have been witnessing a steady inflow of orders for this jet model. The recent order placed by ANA Holdings is a bright example.

Opportunities Ahead for ERJ Stock
 

The demand for global air travel has been on a steady rally recently and is expected to rise in the near future as well. To this end, the International Air Transport Association (“IATA”) expects the number of passengers to increase by 6.7% globally, resulting in 5.2 billion in 2025 compared to 2024. Such a solid passenger traffic projection paves the way for spurring demand for fuel-efficient jets like those manufactured by Embraer.

Embraer’s Commercial Aviation segment backlog at the end of the fourth quarter of 2024 was $10.2 billion, which went up 15% year over year. Such solid backlog strength of the company’s commercial business unit should not only reveal the steady demand that its aircraft enjoy in the global aviation space but also enable it to recognize significant revenue growth in the future once the deliveries are made.

Prospects for Other Aerospace Stocks
 

Other companies that stand to benefit from the growing passenger traffic are Airbus SE EADSY, Textron Inc. TXT and The Boeing Company BA.

Airbus is one of the forerunners in the global commercial aircraft space. Its order backlog amounted to 8,658 commercial aircraft at the end of December 2024, while the company delivered 766 commercial jets in 2024.

Airbus’ long-term (three to five years) earnings growth rate is pegged at 7.6%. The Zacks Consensus Estimate for EADSY’s 2025 sales implies an improvement of 5.5% from the prior-year figure.

Boeing has been a premier manufacturer of commercial jetliners for decades. Its Commercial Airplanes segment delivered 348 airplanes in 2024. This unit had a backlog of $435 billion at 2024-end.

Boeing’s long-term earnings growth rate stands at 17.4%. The Zacks Consensus Estimate for BA’s 2025 sales implies an improvement of 25.6% from the prior-year figure.

Textron’s unit, Textron Aviation, is a well-known designer of business jet brands like Cessna and Beechcraft. The segment’s order backlog at the end of 2024 totaled $7.8 billion. The unit delivered 151 jets last year.

Textron boasts a long-term earnings growth rate of 10%. The Zacks Consensus Estimate for TXT’s 2025 sales implies an improvement of 6.9% from the prior-year figure.

ERJ Stock Price Movement
 

In the past three months, shares of Embraer have risen 5.4% against the industry’s decline of 2.4%.

Image Source: Zacks Investment Research

ERJ’s Zacks Rank
 

Embraer currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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