Why Embraer's Shares Soared Today
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Aircraft manufacturer Embraer jumped 10% today after signing a huge deal with a customer.
So what: The company announced it will make 47 E-175 jets for Republic Airways in a contract worth up to $4 billion. The company also has the option to buy another 47 aircraft, so the deal could balloon for Embraer.
Now what: The deal should keep Embraer busy and adds to a deal with Aldus Aviation for as much as $1.56 billion reported earlier this month. This can be a boom or bust business but it appears that airlines are starved for smaller aircraft in the current environment. Shares now trade at 11.6 times forward earnings estimates, a reasonable price given the big deals the company has signed this month.
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The article Why Embraer's Shares Soared Today originally appeared on Fool.com.
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