I mean, it’s basically the same thing. But the fundamentals are great, these guys have <1x net leverage.
Back in at $18.83. Plan to hold long-term unless we get another big spike.
SUNE BROS
on board now. didn’t love it without the JV but basically same price two years later with a JV in the works and getting paid out the market cap in cash (assuming military JV of some sort) makes this look much better. plus the time frame is more like 2 years now so more palatable holding period. ERJ (excluding the JV) trades at 1/2 the valuation of BBD. including the JV, it likely trades at 1/3. just stupid.
Yeah, ERJ just getting killed in the emerging market sell-off despite sales predominantly in USD while costs are discounted in BRL and no EM demand-centric sensitively. Crazy valuations.
Bump
Catch the falling knife?
I look at this as they know how to make planes and have a backlog. Long term this has to sort itself out at some point.
Given this is an airline/hotel/travel led recession, what are the odds ERJ survives? Or better question, what are the odds current equity holders don’t get wiped out in a restructuring?
I don’t think ERJ is in that much trouble here. Most of the over ordering was in the bigger jets and they are due a major payment from Boeing to form a JV for the commercial aerospace production within the next month. At this stage all intentions seem to be for Boeing to make the payment, at which point ERJ will probably see a debt upgrade, so I’m not particularly concerned about them. TBH I’m more concerned with the long term outlook for Boeing. Not saying they’ll fail, but just that for a myriad of reasons I could write a short story on, they’re going to be dealing with equity value destructive fallout from this over the next few years that will undercut any form of a clean recovery.
What about the Cade review? Just dotting the i’s?
Hard to say for sure given it’s Brazilian politics but if the deal gets undermined I’m comfortable with the firm as a standalone. Their leverage is not so bad, planes are bound by contracts and most of their sales have been to stronger airlines without the larger jet surplus. I’d also assume that being a national champion and defense contractor any fallout from that would find them being backstopped by the government if it got bad enough. My base case remains that the deal gets done.
this was fun. boeing shareholders about to be wiped out
Bump.
I bought OTM November puts on ERJ last Wednesday. Someone’s been writing a few of those because the ask started skyrocketed last Friday. Too bad there’s 0 bid interest 
i saw the news that ba pulled out of deal. but i recall bs sellign out a while back
I am out, but looks like ERJ is officially coronavirused.
should i sell?
Hard to say, my instincts tell me they will survive this and they will have govt support if they need it.
Embraer says Boeing used false claims to ditch $4bn tie-up
I don’t know how this is going to end, but it may be a bumpy ride
RIP my retirement account. I went double levered on the BS portfolio. And now I’m just left with BS. But I will not be deterred
Have you considered SUNI?