Embraer S.A. (ERJ): Today's Featured Aerospace/Defense Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model

Embraer S.A ( ERJ) pushed the Aerospace/Defense industry lower today making it today's featured Aerospace/Defense laggard. The industry as a whole closed the day down 0.9%. By the end of trading, Embraer S.A fell $0.89 (-2.5%) to $35.49 on average volume. Throughout the day, 737,260 shares of Embraer S.A exchanged hands as compared to its average daily volume of 975,200 shares. The stock ranged in price between $35.08-$35.87 after having opened the day at $35.55 as compared to the previous trading day's close of $36.38. Other companies within the Aerospace/Defense industry that declined today were: Astrotech Corporation ( ASTC), down 4.4%, Innovative Solutions and Support ( ISSC), down 3.0%, Erickson Air-Crane ( EAC), down 2.5% and Exelis ( XLS), down 2.2%.
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Embraer S.A. primarily develops, produces, and sells jet and turboprop aircrafts for civil and defense aviation markets in Brazil, North America, Latin America, the Asia Pacific, Europe, and internationally. Embraer S.A has a market cap of $6.7 billion and is part of the industrial goods sector. The company has a P/E ratio of 19.1, above the S&P 500 P/E ratio of 17.7. Shares are up 27.8% year to date as of the close of trading on Monday. Currently there are 5 analysts that rate Embraer S.A a buy, 1 analyst rates it a sell, and 5 rate it a hold.

TheStreet Ratings rates Embraer S.A as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

On the positive front, TAT Technologies ( TATT), down 3.2% and GenCorp ( GY), down 2.6%.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the aerospace/defense industry could consider iShares DJ US Aerospace & Def Idx ( ITA) while those bearish on the aerospace/defense industry could consider ProShares Short Dow 30 ( DOG).

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