Defense Stocks To Watch: Embraer Breaks Out, Safeguards Buy Zone

Company Overview - Embraer is a midcap aerospace and defense company with a market capitalization just above $11 billion, founded in 1969. It operates in various segments including Commercial Aviation, Executive Jets, Defense and Security, and Services and Support [3][4]. Financial Performance - After experiencing four consecutive years of net losses from 2018 to 2021, Embraer reported earnings of 21 cents per share in 2022, 43 cents in 2023, and a significant increase of 481% to $2.51 per share in 2024. Wall Street anticipates a 30% decline in profits for the current year, followed by a rebound with 58% growth projected for 2026 [3][4]. Sales Growth - The company has maintained solid double-digit sales growth, ranging from 16% to 32% over the last seven quarters. In the third quarter, Embraer achieved an 18% revenue growth, surpassing $2 billion [4]. Stock Performance - Embraer shares have recently cleared a buy point of 62.09 and remain within a buy range extending up to 65.19. The stock is trading above its rising 50-day line and is poised to exceed its rising 21-day exponential moving average, indicating strong market leadership [5][6]. Industry Position - Embraer is part of a robust industry group, ranking No. 35 out of 197 groups tracked by Investor's Business Daily. The Aerospace/Defense sector is showing signs of demand, although Embraer did not appear on the latest list of new buys by top mutual funds [2][4].