巴西航空工业公司

Embraer SA receives a 5-star quantitative star rating, reflecting our opinion that this share class offers a compelling opportunity for investors. The stock currently trades at a 16% discount to our quantitative fair value estimate of $84.90 per share; however, some caution is warranted due to this estimate's medium uncertainty rating.

The firm's solid growth increases our estimated fair value. Consistent revenue and earnings growth indicates a company's potential for increased market share and profitability. Reflecting the firm's growth is its revenue 3-year growth of 22.4%, which falls in the top 20% compared with global peers. Robust trailing three-year revenue growth portends a favorable future trajectory, which contributes to our view that shares are undervalued.

On a different note, the firm's valuation metrics are potentially concerning. A company's valuation metrics provide insights into the market's expectations for its future growth and profitability. The firm's book value yield of 23.2%, for example, lies in the bottom 20% compared with global peers. The market value of this company's shares looks expensive relative to the book (accounting) value of equity, which, despite our favorable price/fair value ratio, is a negative attribute.

The company's narrow economic moat rating suggests it should be able to maintain robust profitability for a decade or longer before competition erodes its advantage. In addition, the company's moderate financial health score is decent and doesn't seriously concern us with regard to financial distress.