Intrinsic value of Embraer ADR - ERJ

Previous Close

$19.51

  Intrinsic Value

$47.75

stock screener

  Rating & Target

str. buy

+145%

Previous close

$19.51

 
Intrinsic value

$47.75

 
Up/down potential

+145%

 
Rating

str. buy

We calculate the intrinsic value of ERJ stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  5.58
  19.40
  17.96
  16.66
  15.50
  14.45
  13.50
  12.65
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.29
  7.96
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
Revenue, $m
  6,777
  8,092
  9,545
  11,136
  12,861
  14,720
  16,707
  18,821
  21,058
  23,417
  25,894
  28,489
  31,200
  34,029
  36,976
  40,043
  43,233
  46,548
  49,993
  53,573
  57,294
  61,162
  65,184
  69,367
  73,721
  78,254
  82,976
  87,896
  93,027
  98,380
  103,966
Variable operating expenses, $m
 
  7,654
  9,029
  10,533
  12,165
  13,922
  15,802
  17,801
  19,917
  22,147
  24,489
  26,941
  29,506
  32,181
  34,968
  37,868
  40,884
  44,019
  47,277
  50,663
  54,182
  57,839
  61,643
  65,599
  69,716
  74,003
  78,468
  83,121
  87,973
  93,035
  98,318
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  6,550
  7,654
  9,029
  10,533
  12,165
  13,922
  15,802
  17,801
  19,917
  22,147
  24,489
  26,941
  29,506
  32,181
  34,968
  37,868
  40,884
  44,019
  47,277
  50,663
  54,182
  57,839
  61,643
  65,599
  69,716
  74,003
  78,468
  83,121
  87,973
  93,035
  98,318
Operating income, $m
  227
  437
  516
  603
  696
  797
  905
  1,020
  1,142
  1,270
  1,404
  1,548
  1,695
  1,849
  2,009
  2,175
  2,349
  2,529
  2,716
  2,910
  3,112
  3,323
  3,541
  3,768
  4,005
  4,251
  4,508
  4,775
  5,054
  5,344
  5,648
EBITDA, $m
  630
  920
  1,086
  1,266
  1,463
  1,674
  1,900
  2,141
  2,395
  2,663
  2,945
  3,240
  3,548
  3,870
  4,205
  4,554
  4,917
  5,294
  5,686
  6,093
  6,516
  6,956
  7,413
  7,889
  8,384
  8,900
  9,437
  9,996
  10,580
  11,189
  11,824
Interest expense (income), $m
  180
  147
  211
  282
  360
  444
  535
  632
  736
  845
  960
  1,081
  1,208
  1,340
  1,479
  1,623
  1,772
  1,928
  2,090
  2,259
  2,434
  2,615
  2,804
  3,001
  3,205
  3,418
  3,639
  3,870
  4,110
  4,361
  4,623
Earnings before tax, $m
  176
  290
  305
  320
  336
  353
  370
  388
  406
  425
  444
  466
  487
  508
  530
  553
  576
  600
  626
  652
  679
  707
  737
  768
  800
  833
  868
  905
  943
  983
  1,025
Tax expense, $m
  -11
  78
  82
  86
  91
  95
  100
  105
  110
  115
  120
  126
  131
  137
  143
  149
  156
  162
  169
  176
  183
  191
  199
  207
  216
  225
  234
  244
  255
  266
  277
Net income, $m
  185
  212
  223
  234
  246
  258
  270
  283
  297
  310
  324
  341
  356
  371
  387
  403
  421
  438
  457
  476
  496
  516
  538
  560
  584
  608
  634
  661
  689
  718
  748

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,109
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  12,020
  10,633
  12,543
  14,633
  16,901
  19,342
  21,954
  24,732
  27,672
  30,771
  34,026
  37,436
  40,999
  44,717
  48,589
  52,619
  56,810
  61,167
  65,694
  70,399
  75,288
  80,371
  85,655
  91,153
  96,874
  102,830
  109,035
  115,501
  122,243
  129,277
  136,617
Adjusted assets (=assets-cash), $m
  8,911
  10,633
  12,543
  14,633
  16,901
  19,342
  21,954
  24,732
  27,672
  30,771
  34,026
  37,436
  40,999
  44,717
  48,589
  52,619
  56,810
  61,167
  65,694
  70,399
  75,288
  80,371
  85,655
  91,153
  96,874
  102,830
  109,035
  115,501
  122,243
  129,277
  136,617
Revenue / Adjusted assets
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
Average production assets, $m
  4,065
  4,855
  5,727
  6,681
  7,717
  8,832
  10,024
  11,293
  12,635
  14,050
  15,536
  17,093
  18,720
  20,418
  22,186
  24,026
  25,940
  27,929
  29,996
  32,144
  34,377
  36,697
  39,110
  41,620
  44,233
  46,952
  49,785
  52,738
  55,816
  59,028
  62,379
Working capital, $m
  3,710
  1,343
  1,584
  1,849
  2,135
  2,443
  2,773
  3,124
  3,496
  3,887
  4,298
  4,729
  5,179
  5,649
  6,138
  6,647
  7,177
  7,727
  8,299
  8,893
  9,511
  10,153
  10,821
  11,515
  12,238
  12,990
  13,774
  14,591
  15,443
  16,331
  17,258
Total debt, $m
  3,874
  4,805
  6,419
  8,185
  10,101
  12,164
  14,371
  16,719
  19,203
  21,821
  24,572
  27,453
  30,464
  33,606
  36,878
  40,283
  43,825
  47,506
  51,332
  55,307
  59,438
  63,733
  68,199
  72,844
  77,678
  82,712
  87,954
  93,418
  99,116
  105,059
  111,262
Total liabilities, $m
  8,054
  8,985
  10,599
  12,365
  14,281
  16,344
  18,551
  20,899
  23,383
  26,001
  28,752
  31,633
  34,644
  37,786
  41,058
  44,463
  48,005
  51,686
  55,512
  59,487
  63,618
  67,913
  72,379
  77,024
  81,858
  86,892
  92,134
  97,598
  103,296
  109,239
  115,442
Total equity, $m
  3,966
  1,648
  1,944
  2,268
  2,620
  2,998
  3,403
  3,833
  4,289
  4,769
  5,274
  5,803
  6,355
  6,931
  7,531
  8,156
  8,806
  9,481
  10,183
  10,912
  11,670
  12,457
  13,277
  14,129
  15,015
  15,939
  16,900
  17,903
  18,948
  20,038
  21,176
Total liabilities and equity, $m
  12,020
  10,633
  12,543
  14,633
  16,901
  19,342
  21,954
  24,732
  27,672
  30,770
  34,026
  37,436
  40,999
  44,717
  48,589
  52,619
  56,811
  61,167
  65,695
  70,399
  75,288
  80,370
  85,656
  91,153
  96,873
  102,831
  109,034
  115,501
  122,244
  129,277
  136,618
Debt-to-equity ratio
  0.977
  2.920
  3.300
  3.610
  3.860
  4.060
  4.220
  4.360
  4.480
  4.580
  4.660
  4.730
  4.790
  4.850
  4.900
  4.940
  4.980
  5.010
  5.040
  5.070
  5.090
  5.120
  5.140
  5.160
  5.170
  5.190
  5.200
  5.220
  5.230
  5.240
  5.250
Adjusted equity ratio
  0.096
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155
  0.155

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  185
  212
  223
  234
  246
  258
  270
  283
  297
  310
  324
  341
  356
  371
  387
  403
  421
  438
  457
  476
  496
  516
  538
  560
  584
  608
  634
  661
  689
  718
  748
Depreciation, amort., depletion, $m
  403
  483
  569
  664
  766
  877
  995
  1,120
  1,253
  1,393
  1,540
  1,692
  1,853
  2,022
  2,197
  2,379
  2,568
  2,765
  2,970
  3,183
  3,404
  3,633
  3,872
  4,121
  4,379
  4,649
  4,929
  5,222
  5,526
  5,844
  6,176
Funds from operations, $m
  -703
  695
  792
  898
  1,012
  1,134
  1,265
  1,403
  1,550
  1,704
  1,865
  2,033
  2,209
  2,393
  2,584
  2,782
  2,989
  3,204
  3,427
  3,658
  3,899
  4,150
  4,410
  4,681
  4,963
  5,257
  5,563
  5,882
  6,215
  6,562
  6,925
Change in working capital, $m
  -605
  218
  241
  264
  286
  308
  330
  351
  371
  391
  411
  431
  450
  470
  489
  509
  529
  550
  572
  594
  618
  642
  668
  694
  723
  752
  784
  817
  852
  889
  927
Cash from operations, $m
  -98
  476
  551
  634
  725
  826
  935
  1,053
  1,178
  1,312
  1,454
  1,602
  1,759
  1,923
  2,094
  2,273
  2,459
  2,653
  2,855
  3,064
  3,282
  3,508
  3,743
  3,987
  4,241
  4,505
  4,779
  5,065
  5,363
  5,674
  5,997
Maintenance CAPEX, $m
  0
  -402
  -481
  -567
  -662
  -764
  -874
  -993
  -1,118
  -1,251
  -1,391
  -1,538
  -1,692
  -1,853
  -2,022
  -2,197
  -2,379
  -2,568
  -2,765
  -2,970
  -3,183
  -3,404
  -3,633
  -3,872
  -4,121
  -4,379
  -4,649
  -4,929
  -5,222
  -5,526
  -5,844
New CAPEX, $m
  -981
  -790
  -872
  -954
  -1,035
  -1,115
  -1,193
  -1,268
  -1,342
  -1,415
  -1,486
  -1,557
  -1,627
  -1,697
  -1,768
  -1,840
  -1,914
  -1,989
  -2,067
  -2,148
  -2,232
  -2,321
  -2,413
  -2,510
  -2,612
  -2,720
  -2,833
  -2,952
  -3,078
  -3,211
  -3,352
Cash from investing activities, $m
  -1,069
  -1,192
  -1,353
  -1,521
  -1,697
  -1,879
  -2,067
  -2,261
  -2,460
  -2,666
  -2,877
  -3,095
  -3,319
  -3,550
  -3,790
  -4,037
  -4,293
  -4,557
  -4,832
  -5,118
  -5,415
  -5,725
  -6,046
  -6,382
  -6,733
  -7,099
  -7,482
  -7,881
  -8,300
  -8,737
  -9,196
Free cash flow, $m
  -1,167
  -716
  -802
  -888
  -972
  -1,053
  -1,132
  -1,208
  -1,282
  -1,354
  -1,424
  -1,493
  -1,561
  -1,628
  -1,695
  -1,764
  -1,833
  -1,904
  -1,978
  -2,054
  -2,133
  -2,217
  -2,304
  -2,396
  -2,492
  -2,595
  -2,702
  -2,816
  -2,937
  -3,064
  -3,199
Issuance/(repayment) of debt, $m
  53
  1,457
  1,614
  1,766
  1,916
  2,063
  2,207
  2,347
  2,484
  2,619
  2,751
  2,881
  3,011
  3,141
  3,272
  3,405
  3,541
  3,681
  3,826
  3,975
  4,132
  4,295
  4,466
  4,645
  4,834
  5,033
  5,243
  5,464
  5,697
  5,943
  6,203
Issuance/(repurchase) of shares, $m
  2
  53
  73
  90
  106
  121
  135
  147
  159
  170
  180
  188
  197
  205
  213
  221
  229
  237
  245
  253
  262
  271
  281
  292
  303
  315
  328
  342
  356
  372
  389
Cash from financing (excl. dividends), $m  
  37
  1,510
  1,687
  1,856
  2,022
  2,184
  2,342
  2,494
  2,643
  2,789
  2,931
  3,069
  3,208
  3,346
  3,485
  3,626
  3,770
  3,918
  4,071
  4,228
  4,394
  4,566
  4,747
  4,937
  5,137
  5,348
  5,571
  5,806
  6,053
  6,315
  6,592
Total cash flow (excl. dividends), $m
  -1,362
  794
  885
  968
  1,051
  1,131
  1,210
  1,286
  1,361
  1,435
  1,507
  1,576
  1,647
  1,718
  1,790
  1,863
  1,937
  2,014
  2,093
  2,175
  2,260
  2,350
  2,443
  2,541
  2,645
  2,754
  2,868
  2,989
  3,117
  3,251
  3,393
Retained Cash Flow (-), $m
  654
  -265
  -296
  -324
  -351
  -378
  -405
  -431
  -456
  -480
  -505
  -529
  -552
  -576
  -600
  -625
  -650
  -675
  -702
  -729
  -758
  -788
  -819
  -852
  -887
  -923
  -962
  -1,002
  -1,045
  -1,090
  -1,138
Prev. year cash balance distribution, $m
 
  2,583
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  3,112
  589
  644
  699
  753
  805
  856
  906
  954
  1,002
  1,048
  1,095
  1,142
  1,190
  1,238
  1,288
  1,339
  1,391
  1,446
  1,502
  1,562
  1,624
  1,689
  1,758
  1,830
  1,907
  1,987
  2,072
  2,161
  2,256
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  2,984
  539
  561
  576
  583
  584
  578
  566
  548
  526
  498
  467
  434
  399
  364
  327
  291
  256
  223
  191
  162
  135
  111
  90
  71
  56
  43
  32
  24
  17
Current shareholders' claim on cash, %
  100
  96.0
  91.5
  87.1
  82.9
  79.0
  75.3
  71.9
  68.8
  65.9
  63.3
  61.0
  58.8
  56.8
  55.0
  53.3
  51.7
  50.2
  48.8
  47.6
  46.3
  45.2
  44.1
  43.1
  42.1
  41.2
  40.3
  39.4
  38.6
  37.8
  37.0

Embraer S.A. (Embraer) is a manufacturer of jets of 70 to 130 seats. The Company produces aircraft for commercial and executive aviation, and for defense and security purposes and related services. Its segments include Commercial aviation business, which involves the development, production and sale of commercial jets, and rendering of support services, particularly in the regional aviation segment and aircraft leases; Executive Jet business, which markets its executive jets to companies, including fractional ownership companies, charter and air-taxi companies, high-net-worth individuals and to flight academies; Defense and Security Business segment, which conceives, designs, develops, manufactures and supports a range of integrated solutions for the defense and security market, and Other Related Businesses segment, which provides fuel systems, structural parts, and mechanical and hydraulic systems to Sikorsky Aircraft Corporation for its production of helicopters.

FINANCIAL RATIOS  of  Embraer ADR (ERJ)

Valuation Ratios
P/E Ratio 77.5
Price to Sales 2.1
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow -146.2
Price to Free Cash Flow -13.3
Growth Rates
Sales Growth Rate 5.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 19.6%
Cap. Spend. - 3 Yr. Gr. Rate 5.4%
Financial Strength
Quick Ratio 6
Current Ratio 0.1
LT Debt to Equity 84.4%
Total Debt to Equity 97.7%
Interest Coverage 2
Management Effectiveness
Return On Assets 2.8%
Ret/ On Assets - 3 Yr. Avg. 2.4%
Return On Total Capital 2.2%
Ret/ On T. Cap. - 3 Yr. Avg. 2.8%
Return On Equity 4.3%
Return On Equity - 3 Yr. Avg. 5.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 19.9%
Gross Margin - 3 Yr. Avg. 19.4%
EBITDA Margin 11.2%
EBITDA Margin - 3 Yr. Avg. 12.5%
Operating Margin 3.3%
Oper. Margin - 3 Yr. Avg. 5.8%
Pre-Tax Margin 2.6%
Pre-Tax Margin - 3 Yr. Avg. 5.3%
Net Profit Margin 2.7%
Net Profit Margin - 3 Yr. Avg. 3.1%
Effective Tax Rate -6.3%
Eff/ Tax Rate - 3 Yr. Avg. 33.1%
Payout Ratio 17.3%

ERJ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ERJ stock intrinsic value calculation we used $6777 million for the last fiscal year's total revenue generated by Embraer ADR. The default revenue input number comes from 2016 income statement of Embraer ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ERJ stock valuation model: a) initial revenue growth rate of 19.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ERJ is calculated based on our internal credit rating of Embraer ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Embraer ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ERJ stock the variable cost ratio is equal to 94.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ERJ stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.4% for Embraer ADR.

Corporate tax rate of 27% is the nominal tax rate for Embraer ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ERJ stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ERJ are equal to 60%.

Life of production assets of 10.1 years is the average useful life of capital assets used in Embraer ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ERJ is equal to 16.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3966 million for Embraer ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 186.856 million for Embraer ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Embraer ADR at the current share price and the inputted number of shares is $3.6 billion.

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COMPANY NEWS

▶ ExpressJets Relationship with United Continental   [Dec-14-17 12:51PM  Market Realist]
▶ ETFs with exposure to Embraer SA : December 5, 2017   [Dec-05-17 12:45PM  Capital Cube]
▶ DUBAI: Embraer focused on E2 service entry   [Nov-15-17 09:28AM  Flightglobal]
▶ Why Embraer Is Focused on the Middle East   [Nov-13-17 01:06AM  Bloomberg Video]
▶ ETFs with exposure to Embraer SA : November 3, 2017   [Nov-03-17 12:09PM  Capital Cube]
▶ Embraer warns of weaker 2018 due to E2 ramp-up   [Oct-27-17 12:57PM  Reuters]
▶ Embraer Expects Headwinds for 2018   [11:25AM  Motley Fool]
▶ Embraer beats 3Q profit forecasts   [05:09AM  Associated Press]
▶ Are Markets In the Calm Before the Storm?   [Oct-18-17 07:40AM  InvestorPlace]
▶ New Strong Sell Stocks for October 16th   [Oct-16-17 08:43AM  Zacks]
▶ 3 Growth Stocks for the 21st Century   [Oct-11-17 05:30PM  Motley Fool]
▶ Embraer forecast: Business jet deliveries to stay soft   [Oct-09-17 04:39PM  CNBC Videos]
▶ Embraer Announces Firm Order for 20 E-Jets from SkyWest   [Oct-02-17 08:55AM  PR Newswire]
▶ Air Force Eyes Light-Attack Plane But This Is 'Job One'   [Sep-19-17 08:32AM  Investor's Business Daily]
▶ [$$] Embraer Considers Building a New Turboprop Plane   [Sep-15-17 11:41PM  The Wall Street Journal]
▶ [$$] Embraer Considers Building a New Turboprop Plane   [11:10AM  The Wall Street Journal]
▶ Embraer Shows Market Leadership With Jump To 81 RS Rating   [Sep-07-17 03:00AM  Investor's Business Daily]
▶ Embraer Earns RS Rating Upgrade   [03:00AM  Investor's Business Daily]
▶ ETFs with exposure to Embraer SA : August 24, 2017   [Aug-24-17 03:17PM  Capital Cube]
▶ 6 Aerospace and Defense Companies Gurus Are Buying   [Aug-07-17 03:27PM  GuruFocus.com]
▶ 3 Growth Stocks for In-the-Know Investors   [Aug-02-17 05:15PM  Motley Fool]
▶ Embraer beats 2Q profit forecasts   [Jul-28-17 08:23PM  Associated Press]
▶ Should You Sell Embraer (ERJ) Before Earnings?   [Jul-27-17 08:53AM  Zacks]
Financial statements of ERJ
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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