We recently published a list of 10 Defense and Aerospace Stocks To Benefit From Trump’s Peace Through Strength Policy. In this article, we are going to take a look at where Embraer S.A. (NYSE:ERJ) stands against other defense and aerospace stocks to benefit from Trump’s peace through strength policy.
Donald Trump is a vocal critic of international conflicts, especially those in which the US gets involved militarily or financially. At his inauguration, he continued the old Republican policy of Peace Through Strength, implying that the US and its allies should increase defense spending not to fight more wars but to ensure fewer wars happen.
In other words, this means defense contractors continue to make money even if global conflicts die down under Donald Trump. EU leaders have just held an informal meeting to discuss transatlantic relations and defense spending. President of the European Commission, Ursula von der Leyen, is considering extraordinary measures to boost defense budgets.
Under these circumstances, it is vital to understand that most defense and aerospace stocks should continue to benefit even during peaceful times. We, therefore, decided to create a list of stocks that are likely to survive any change in policy during the unpredictable Donald Trump’s term.
To come up with our list of 10 Defense and Aerospace stocks that will benefit from Trump’s Peace Through Strength policy, we only considered stocks that have a market cap of at least $5 billion, an ROE of over 15%, and a forward PE under 40 against an industry average PE of 63.
An engineer examining a detailed blueprint of an aircraft.
Embraer S.A. (NYSE:ERJ)
Embraer S.A. (NYSE:ERJ) is a developer, designer, manufacturer, and seller of aircraft and systems. It operates in defense & security, services & support, commercial aviation, executive aviation, and other segments. Despite the fact that analysts were pessimistic about the stock at the end of the previous year, positive news has started emerging.
Embraer S.A. (NYSE:ERJ) received firm orders from Uruguay’s Air Force for five A-29 Super Tucano light-attack aircraft. The order was a result of a contract signed in August and includes integrated logistics services, mission equipment, and a flight simulator. Moreover, the firm released its final quarter deliveries for 2024 which indicated a 27% increase in aircraft deliveries as compared to the previous quarter.
For FY 2024, ERJ recorded a 14% gain from the previous year with a total of 206 aircraft being delivered in the full year. Embraer’s stock started gaining upward momentum within a few days after it announced its final quarter deliveries report. The company’s share price was up 7% in January and is set to be a consistent performer in 2025.
Overall, ERJ ranks 8th on our list of defense and aerospace stocks to benefit from Trump’s peace through strength policy. While we acknowledge the potential of ERJ as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as ERJ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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