ADRs in Focus: Embraer slips after Citi target cut

U.S.-traded shares of Empresa Brasileira de Aeronutica SA fell to a fresh-52 week low Friday after a Citi Investment Research analyst cut his price target and risk rating on the Brazilian aircraft maker, citing higher expenses and volatility in the sector.

American Depositary Receipts of Embraer lost $1.31, or 3.8 percent, to $33.40. Earlier in the session, the stock hit a fresh 52-week low of $33.28.

Analyst Stephen Trent cut his price target to $55 from $65 in a note to investors late Thursday, noting currency concerns and higher research and development costs. The new price reflects an expected gain of 58.5 percent from Thursday's close of $34.71.

He also lowered his risk rating to "Speculative" from "Medium," citing higher trading volatility in the aircraft manufacturing sector.

Still, he maintained his overall "Buy" rating on the company, calling Embraer "defensive," predicting weakness among carriers may make smaller aircraft _ the type in which Embraer specializes _ more attractive as they seek to raise their load factors.

The broader ADR market declined on Friday as U.S. markets fell sharply, reacting to news of higher oil prices and a report from the U.S. Labor Department that unemployment rose to 5.5 percent in May from 5 percent the month before.

The Bank of New York Latin America ADR Index fell 9.51 points, or 1.9 percent, to 482.37.

The Bank of New York Composite ADR Index gave up 4.38 points, or 2.4 percent, to 177.54.