Bloomberg News

Embraer Gains for Second Week on ‘Buy’ From Deutsche Bank

October 21, 2011

(Updates with closing prices in second paragraph.)

Oct. 21 (Bloomberg) -- Embraer SA, the world’s fourth- largest plane builder, advanced in Sao Paulo, adding to a second weekly gain, after it was rated “buy” in new coverage at Deutsche Bank AG.

Shares rose 2.3 percent to 12.34 reais at the close of trading, extending this week’s advance to 4.5 percent. The benchmark Bovespa index rose 2.3 percent today and posted a 0.4 percent weekly gain.

Embraer’s commercial jets unit is poised for a “prolonged period of growth,” Deutsche Bank’s analyst Myles Walton wrote in a note to clients today. The company could also “increase production of its regional jets by 15 percent without adding any direct labor costs,” which would help to boost its profit margin, Walton wrote.

Separately, Royal Jordanian Airlines said it intends to expand its fleet of Embraer and Airbus SAS planes, according to Chief Executive Officer Hussein Dabbas. “We are just waiting for the right time,” he said.

The carrier doesn’t plan to order any new planes this year or next, according to Dabbas.

--Editors: Richard Richtmyer, Glenn J. Kalinoski

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net


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