Brazil’s EMBRAER gets positive news on eVTOLs; shares close up 5.6%

RIO DE JANEIRO, BRAZIL – Eve, an EMBRAER (EMBR3) company, and Sydney Seaplanes, yesterday, December 6, announced a partnership that will enable the deployment of electric air taxi operations in the Greater Sydney area, in Australia.

Through the partnership, Sydney Seaplanes has ordered 50 electric vertical take-off and landing (eVTOL) aircraft from Eve, with deliveries scheduled to begin in 2026.

The new partnership accelerates more sustainable tourism in the Greater Sydney region using 100% electric zero-emission aviation.

Also, over the weekend Eve announced a partnership with Australian helicopter operator Nautilus Aviation to develop the Urban Air Mobility (UAM) ecosystem in Australia.

Nautilus ordered 10 electric vertical take-off and landing (eVTOL) aircraft from Eve to operate in tourist attractions in Queensland, in northern Australia.

EMBR3 shares closed up 5.64% on the B3, at R$20.23 (US$3.56), on an also upward day for Ibovespa.

According to Itaú BBA, both announcements involving Eve are positive. “The Nautilus and Sydney Seaplanes orders coupled with the more recent announcements from Bristow and Avantto represent 260 additional eVTOL orders not yet reflected in our model (which incorporates 250 aircraft), entailing an extra US$5.90 per Embraer ADR (ERJ) compared to our 2022 target price of US$21 per share,” it assesses. The recommendation for the ADRs (in practice, the company’s assets traded in the US) is outperform.

The Nautilus order alone would lead to an additional US$0.20 per ERJ asset, while Sydney Seaplanes would represent an extra US$1.10 per ERJ paper.

BBA analysts point out that in recent months Eve has been announcing several partnerships for urban air mobility development and boosting demand for eVTOLs, as some of its collaborators (such as Helipass, Blade and Ascent) have also contracted Eve’s eVTOL services through flight hours.

“We believe that these developments can help investors feel more comfortable when it comes to pricing the subsidiary. We note that EMBRAER is negotiating on a potential merger between Eve and Zanite Acquisition Corp (a US-listed SPAC), which could be a catalyst for shares,” they note.