SÃO JOSÉ DOS CAMPOS, Brazil, August 11, 2026, 16:12 EDT
- Embraer raised its minimum free cash flow target for 2026, setting the floor at no less than $400 million.
- The company increased its adjusted EBIT margin outlook to a range of 10.0%–10.6%.
- Revenue for the quarter hit a record high of $2.235 billion, while backlog climbed to $34.5 billion.
Embraer S.A. NYSE:EMBJ raised its minimum free-cash-flow target for 2026 to $400 million from $200 million following a quarterly revenue high. The Brazilian aircraft manufacturer reported record results.
The revision carries more significance than the headline delivery increase. Revenue and aircraft delivery goals remain unchanged. As a result, higher cash flow and margin projections indicate improvements in product mix, pricing power, and manufacturing performance.
The current challenge for investors is whether Embraer can convert its record order backlog into cash flow, all while avoiding another significant increase in output. Following the report, shares rose up to 7% in São Paulo on Monday.
| Second-quarter measure | Reported | Year-on-year change | Wall Street estimate |
|---|---|---|---|
| Revenue | $2.235 billion | up 23% | $2.012 billion |
| Adjusted earnings per ADS | $1.19 | climbed 177% | $0.62 |
| Adjusted net income | $218.6 million | rose 38% | Not stated |
| Adjusted free cash flow | $401.0 million | compared with a loss of $161.6 million | Not stated |
The quarter surpassed forecasts for both sales and profits. Adjusted free cash flow improved by over $560 million compared to the previous year. This cash generation underpins the increased full-year minimum.
Revenue in Brazilian reais climbed 10% to 11.34 billion reais. Net profit was up 25% at 1.11 billion reais. EBITDA advanced 30% to reach 1.81 billion reais. The defense and security segment posted the strongest growth, with revenue rising 22%.
| 2026 guidance | Original range | Updated range | Change |
|---|---|---|---|
| Revenue | $8.2–$8.5 billion | $8.2–$8.5 billion | No change |
| Commercial deliveries | 80–85 | 80–85 | No change |
| Executive-jet deliveries | 160–170 | 160–170 | No change |
| Adjusted EBIT margin | 8.7%–9.3% | 10.0%–10.6% | Increase of 1.3 percentage points |
| Adjusted free cash flow | At least $200 million | At least $400 million | Minimum raised twofold |
Embraer initially established the lower end of its margin and cash forecasts in February. Monday’s revision raised both metrics, with revenue and delivery guidance unchanged. This highlights the improvement in operating leverage.
Embraer handed over 65 aircraft in the quarter, with executive aviation accounting for 45 jets and commercial aviation providing 20. Overall deliveries increased by 7% compared to the same period last year.
Production leveling is the next focus area. Chief Executive Francisco Gomes Neto stated, “In 2027 we’ll see a much better performance in terms of production leveling.” Improved line balance is expected to drive productivity following extended supply-chain challenges. Reuters
| Backlog segment | June 2026 backlog | Year-on-year change |
|---|---|---|
| Commercial Aviation | $15.1 billion | +15% |
| Executive Aviation | $7.8 billion | +5% |
| Defense & Security | $6.1 billion | +42% |
| Services & Support | $5.5 billion | +12% |
| Total | $34.5 billion | +16% |
The backlog grew by 7% compared to March and 16% from June 2025, marking a record high for the seventh month in a row. Defense saw the largest gain, offering Embraer a further mix improvement channel outside of commercial aircraft.
| Broker | Latest rating | Price target | Rating date |
|---|---|---|---|
| Scotiabank | Sector Outperform | $81 | June 8, 2026 |
| Citigroup | Buy | $76 | May 26, 2026 |
| JPMorgan | Overweight | $80 | May 12, 2026 |
| UBS | Hold | $65 | March 26, 2026 |
Analyst expectations are still highly varied. Out of 15 analysts surveyed, 14 rate the stock positively and one has a hold. The group sets an average price target of $80.80, with individual estimates ranging from $65 up to $97. Recent brokerage moves highlighted above indicate where key differences remain.
Execution risks are still significant. Shortages among suppliers may postpone engines and components. Deliveries continue to be more prominent in the latter half. Although the backlog is robust, it does not ensure when cash will be received.
The stock’s next reliable driver will be confirmation that the new floor remains intact. Investors are monitoring if Embraer achieves at least $400 million in free cash flow and maintains a 10.0%–10.6% margin, all without increasing its volume target.
