By Brazil Stock Guide – Embraer (B3: EMBJ3; NYSE: EMBJ) heads into 2026 facing a tougher market test after two consecutive years of strong share-price gains, according to BTG Pactual. Following a 2025 marked by record commercial aircraft sales, expanding defence exposure and improving operations, investors are now questioning how far execution can continue to justify valuations above historical averages.
The numbers both support the story and raise expectations. Consolidated revenue increased from $6.4bn in 2024 to $7.4bn in 2025 and is projected to reach about $8.3bn in 2026, BTG estimates. EBITDA rose from $733m to $881m last year and is expected to approach $1.0bn in 2026, with margins stabilising near 12%. Rapid deleveraging has pushed net debt to roughly 0.5 times EBITDA, easing a long-standing concern for equity holders.
“2025 was another stellar year for Embraer, and sustaining that pace in 2026 will be the company’s main challenge,” BTG said.
Aviation and defence
In commercial aviation, the bank sees continued tailwinds from persistent production constraints at larger manufacturers, which keep favouring Embraer’s E2 jets. As a result, the market focus has shifted from winning new campaigns to the quality of orders, pricing power and delivery execution. In defence, higher military budgets, particularly in Europe and Latin America, have turned the segment into a structural pillar of the investment case rather than a cyclical boost.
Execution in focus
In business aviation, demand remains solid, but execution has become the key variable. Investors are watching whether the company can translate its strong backlog into deliveries without reviving supply-chain bottlenecks. Net income, which fell to $257m in 2025, is expected to rebound to about $478m in 2026 as volumes increase and fixed costs are diluted.
That operational debate feeds directly into valuation. Embraer trades at about 12 times forward EV/EBITDA for 2026, above its own historical norms but still roughly 30% below global peers. On alternative measures, the shares trade at around 0.4 times EV-to-backlog, a metric gaining prominence among global investors. Liquidity has also surged, with trading volumes roughly 2.5 times higher than at the start of 2025.
Risks remain well defined. A stronger Brazilian real could erode export competitiveness, while changes in US import tariffs or a de-escalation of geopolitical tensions could weigh on defence demand. Shares, which have ranged from about $37 to nearly $70 over the past year, suggest that much of the optimism is already priced in. For BTG, 2026 will be less about promise and more about proof: deliveries, backlog conversion and financial discipline will decide whether the rally can continue.
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