Category: 3. Business

Maranello, Italy | Since its blockbuster listing in New York almost a decade ago, Ferrari has consistently delivered industry-beating profits with a market valuation of a luxury brand rather than a carmaker.

Investors are now nervous that the winning streak may not last for the Italian group as it enters a new era of electric vehicles and geopolitical uncertainty.

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The success rate of immunotherapy for bladder cancer has become a central question for patients and oncologists alike. Bladder cancer is one of the most common malignancies of the urinary tract, accounting for over 600,000 new cases and 220,000 deaths worldwide each year (Sung et al., 2021). It has long been considered an immune-responsive tumor, making it a leading model for understanding how the immune system can control or eliminate cancer.

For decades, intravesical Bacillus Calmette–Guérin (BCG) has been the standard of care for early-stage disease, representing one of the earliest successful uses of immunotherapy in oncology. More recently, immune checkpoint inhibitors have revolutionized treatment for advanced or metastatic bladder cancer, providing durable responses and prolonged survival for a subset of patients. However, the success rate of immunotherapy for bladder cancer varies widely depending on the disease stage, molecular profile, and therapeutic strategy used.

Read About Immunotherapy for Bladder Cancer on OncoDaily

Immunotherapy in Bladder Cancer: A Brief Overview

Immunotherapy works by mobilizing the patient’s immune system to identify and destroy malignant cells. In bladder cancer, the immune system’s interaction with tumor tissue is especially significant due to the tumor’s high mutational load and immune infiltration. This biological context helps explain why the success rate of immunotherapy for bladder cancer is higher than for many other solid tumors.

The two major forms of immunotherapy currently used in bladder cancer are intravesical BCG for non–muscle-invasive tumors and systemic immune checkpoint inhibitors for locally advanced or metastatic disease. Both approaches aim to enhance the immune response against cancer, but their mechanisms and success rates differ.

Non–Muscle-Invasive Bladder Cancer and BCG Immunotherapy

In non–muscle-invasive bladder cancer (NMIBC), BCG remains the cornerstone of treatment. Administered directly into the bladder, it stimulates a local immune response that targets tumor cells. Numerous studies have demonstrated that BCG therapy prevents recurrence in 60–70% of patients and delays disease progression in about 30–40% (Sylvester et al., 2002). These results underscore the high success rate of immunotherapy for bladder cancer at this early stage.

However, not all patients respond favorably. Around one-third of individuals are considered “BCG-unresponsive,” meaning the disease recurs or persists despite adequate treatment. For these patients, alternative approaches are essential. Recently, systemic immunotherapy with checkpoint inhibitors has emerged as a valuable option for BCG-unresponsive NMIBC, further extending the reach of immunotherapy beyond local treatment.

Immunotherapy for BCG-Unresponsive Disease

For patients whose tumors do not respond to BCG, pembrolizumab has provided new hope. The KEYNOTE-057 trial demonstrated that pembrolizumab achieved a complete response rate of 41% at three months among patients with carcinoma in situ, and nearly 20% maintained that response for at least one year (Balar et al., 2021). These results represent a meaningful advance in the success rate of immunotherapy for bladder cancer at the non-muscle-invasive stage.

While not every patient experiences durable benefit, pembrolizumab offers a bladder-sparing alternative to surgery for those who are ineligible for or decline cystectomy. The trial’s long-term follow-up continues to show that a subset of patients achieve sustained remission, highlighting the potential of systemic immunotherapy to change the natural course of early-stage bladder cancer.

Advanced and Metastatic Disease: Expanding the Benefits

In advanced or metastatic urothelial carcinoma, immune checkpoint inhibitors have redefined the treatment paradigm. The pivotal KEYNOTE-045 study compared pembrolizumab to chemotherapy in patients whose disease had progressed after platinum-based treatment. The overall response rate was 21% for pembrolizumab compared with 11% for chemotherapy, and median overall survival increased from 7.4 months to 10.3 months (Bellmunt et al., 2017). The durability of these responses significantly improved the success rate of immunotherapy for bladder cancer in this challenging setting.

Atezolizumab produced similar outcomes in the IMvigor210 study, with response rates ranging between 15% and 23%, particularly in patients whose tumors expressed high levels of PD-L1 (Rosenberg et al., 2016). Importantly, many of these responses lasted years, with some patients maintaining complete remission long after treatment discontinuation.

Perhaps the most transformative progress has come from avelumab maintenance therapy. The JAVELIN Bladder 100 trial demonstrated that patients who received avelumab maintenance after first-line chemotherapy had a median overall survival of 21.4 months, compared to 14.3 months with best supportive care (Powles et al., 2020). This established maintenance immunotherapy as a new global standard and pushed the success rate of immunotherapy for bladder cancer to unprecedented levels in metastatic disease.

Read About Bladder Cancer on OncoDaily

Determinants of Success

The variability in the success rate of immunotherapy for bladder cancer can be explained by differences in tumor biology, immune microenvironment, and patient factors. Tumors with high PD-L1 expression or elevated tumor mutational burden tend to respond better to checkpoint inhibitors. Similarly, mutations in DNA damage repair (DDR) genes are associated with increased immune sensitivity. Conversely, patients with immune-cold tumors, few infiltrating lymphocytes, or liver metastases often experience limited benefit.

Beyond biological features, clinical factors such as performance status, comorbidities, and prior therapies also affect outcomes. Researchers are working to refine predictive biomarkers to identify which patients are most likely to achieve durable responses, thereby improving the overall success rate of immunotherapy for bladder cancer through precision medicine.

Combination Approaches: Toward Higher Success Rates

To enhance efficacy, ongoing trials are combining immunotherapy with chemotherapy, targeted therapy, or antibody–drug conjugates. One of the most promising examples is the combination of pembrolizumab with enfortumab vedotin, evaluated in the EV-103/KEYNOTE-869 trial. This regimen produced an extraordinary response rate of 73% and a complete response rate of 15% in previously untreated metastatic bladder cancer (Yu et al., 2021). Such findings suggest that the future success rate of immunotherapy for bladder cancer could exceed current benchmarks as combination strategies become standard practice.

Limitations and Challenges

Despite these advances, several challenges remain. Not all patients benefit from immunotherapy, and resistance—either primary or acquired—remains common. Adverse events such as pneumonitis, colitis, or thyroid dysfunction can occur, sometimes necessitating treatment interruption. Access to genomic testing and immunotherapy agents may also be limited in certain regions, creating disparities in care that influence real-world outcomes.

Nevertheless, ongoing research and the development of next-generation immunotherapies promise to overcome many of these obstacles. By integrating molecular diagnostics, artificial intelligence, and adaptive trial designs, clinicians aim to further increase the success rate of immunotherapy for bladder cancer globally.

The Future of Immunotherapy in Bladder Cancer

Looking ahead, immunotherapy is expected to remain at the forefront of bladder cancer treatment. The focus is shifting toward biomarker-guided therapy, novel immune targets such as TIGIT and LAG-3, and personalized combination regimens. Clinical trials are increasingly using artificial intelligence to analyze genomic and imaging data, helping to predict which patients will respond best.

As scientific understanding deepens, it is anticipated that the success rate of immunotherapy for bladder cancer will continue to climb, potentially transforming the disease from a terminal condition into a chronic, manageable one for many patients.

Conclusion

The success rate of immunotherapy for bladder cancer depends on disease stage, treatment type, and tumor biology. For non–muscle-invasive disease treated with BCG, recurrence prevention rates reach up to 70%. For BCG-unresponsive disease treated with pembrolizumab, complete responses occur in about 40% of patients, with some maintaining remission beyond one year. In advanced or metastatic bladder cancer, checkpoint inhibitors achieve response rates of approximately 20–25%, while maintenance avelumab extends median survival beyond 21 months. Combination therapies such as pembrolizumab with enfortumab vedotin are now pushing response rates past 70%, marking a new era in bladder cancer care.

While immunotherapy is not universally effective, its ability to deliver durable, long-term control represents one of the greatest achievements in modern oncology. Continued innovation, precision biomarker use, and global accessibility will further improve the success rate of immunotherapy for bladder cancer, bringing hope to thousands of patients each year.

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Written by Armen Gevorgyan, MD

Finding the right penny stock can turbocharge returns. Just look at Defence Holdings, a small-cap that’s developing AI-enabled software defence systems. It’s up 4,380% in one year!

In reality though, successful penny stocks are rare beasts, and this type of eye-popping return is rarer still. But for investors with a high risk tolerance, it may be worth digging into businesses operating in growth markets with untapped future potential.

Agronomics (LSE:ANIC) certainly falls into this category. It’s a venture capital company focused on the nascent fields of cellular agriculture and precision fermentation.

This area is often called ‘clean food’ or ‘cultivated meat’, as it involves growing animal products directly from cells instead of raising whole animals.

So far, Agronomics has invested in more than 20 start-ups. These include SuperMeat (cultivated chicken), BlueNalu (cultivated seafood), Meatable (cultivated pork and beef), and VitroLabs (cultivated leather).

Of course, these names will be obscure to most investors, as they’re still largely early-stage. However, some are starting to commercialise their products and services.

Last month, for example, portfolio holding Clean Food Group received regulatory approval for its CLEAN Oil 25 to be used as a cosmetic ingredient in the UK, US, and Europe. Clean Foods manufactures sustainable oils and fats through fermentation.

Developed in collaboration with THG LABS and Croda International, this breakthrough product is a sustainable alternative to conventional oil ingredients in the skincare, haircare, and wider personal care categories (all massive markets).

Palm oil is used in around 70% of cosmetic products, and it remains one of the leading drivers of tropical deforestation. For decades, the beauty industry has faced a difficult challenge, aware of the damage caused by palm oil, but unable to replace it due to its unique properties. Today, that changes with this new regulatory approval.

Significant commercial progress like this should start to drive portfolio returns. To date, Agronomics has invested a total of £1.6m into Clean Food Group. Subject to audit, the firm says this is currently carried at £6.9m, representing a significant uplift.

The position represents around 4.8% of Agronomics’ last stated net asset value (NAV), as calculated in June. That was 14.4p per share, which suggests the shares at just under 7p are trading at more than a 50% discount to NAV.

It goes without saying that this stock is very much in the high-risk, high-reward camp. There’s no guarantee these start-ups will ever find commercial success, while a consumer backlash against lab-grown food could torpedo investor sentiment (and funding) for the sector.

Also, while NAV gives a rough idea of value, calculating it is hardly an exact science. Agronomics’ holdings are all private, so their valuations only get updated periodically.

Nevertheless, this steep discount to NAV likely underpins the stock’s far higher broker price targets. The two analysts covering Agronomics currently have a median 12-month target of 14.9p.

That’s a whopping 113% above the current share price!

According to Agronomics, precision fermentation, biomass fermentation, and cultivated meat technologies represent a $200bn+ market opportunity by 2040.

Agronomics gives investors rare exposure to the ground floor of a potentially transformative industry. For those with a stomach for high risk and volatility, I think this 7p penny stock is well worth checking out.

The post Meet the 7p penny stock that two brokers think could soar 113% appeared first on The Motley Fool UK.

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Ben McPoland has no position in any of the shares mentioned. The Motley Fool UK has recommended Croda International Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2025

Like Warren Buffett, I love buying top stocks when they’re trading cheaply. So I’ve used recent weakness in the Coca-Cola HBC (LSE:CCH) share price to boost my holdings in the FTSE 100 stock.

At £33.40 per share, the Coca-Cola bottler remains roughly 20% more expensive than it was at the start of 2025. But it’s dropped sharply from its record peaks above £41.02 hit back in May.

This was a bargain opportunity I thought was too good to pass up, and bought more at £32.87 per share. Here’s why.

Major consumer goods companies often command higher valuations than the broader market. Investors are drawn to their predictable earnings and robust cash flows, making them reliable selections over the long term.

In Coca-Cola HBC’s case, stock pickers have been willing to pay a premium for the exceptional brand power of drinks like Coke, Fanta, Sprite, and Monster Energy. The soft drinks market is largely immune to changes in the economic cycle. With globally-recognised labels like these, the FTSE company enjoys even greater demand resilience.

Furthermore, this unrivalled brand strength allows the drinks bottler to raise prices without losing much (if any) market share. This is a powerful weapon in offsetting rising cost pressures and growing profits over time.

Latest financials in August underlined these defensive qualities in action. Despite some tough conditions, organic revenues rose across all regions in the first half, improving 2.6% at group level. Its operating profit margin increased 50 basis points to 11.5%, while operating profit leapt 13.9% year on year.

It’s not just Coca-Cola HBC’s sturdiness that’s a major attraction, though. Thanks to its substantial footprint in fast-growing regions — including parts of Africa and Central and Eastern Europe — the business also has significant growth potential that investors are happy to pay for.

This is another advantage recently displayed in those half-year results. The firm’s organic revenues in emerging and developing markets rose 6.2% and 17.4% in the period. These regions now make up more than two-thirds of group revenues combined.

So given this resilience, why have the shares dropped so sharply? One reason could be that the ‘discount rate’ used to value future earnings rises when interest rates stay high. With hopes of sustained rate cuts fading, stable growth stocks like this are coming under pressure.

It’s possible that fears of how weight-loss jabs like Ozempic will impact demand have hit the shares. While a threat, my view is that the company’s large (and increasing) stable of low-sugar drinks and presence in regions where jab usage is low substantially reduces this danger.

Coca-Cola HBC’s share-price drop now leaves it trading on a forward price-to-earnings (P/E) ratio of 14.5 times. That some way below the five-year average of 18.7 times, and represented a compelling entry point for me to increase my holdings in the drinks bottler.

I’m convinced the FTSE 100 stock will rebound to reach new highs. If City analysts are correct, this could happen sooner rather than later. The average 12-month share price forecast among 17 analysts is £41.78. That’s up more than 25% from today’s levels.

The post At £32.87, I couldn’t resist this dirt-cheap FTSE 100 growth stock! appeared first on The Motley Fool UK.

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Royston Wild has positions in Coca-Cola Hbc Ag. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2025

The Pentagon has sought to procure up to $1bn worth of critical minerals as part of a global stockpiling spree to counter Chinese dominance of the metals that are essential to defence manufacturers.

The Trump administration’s accelerated effort to bolster the national stockpile is outlined in public filings published in recent months by the Pentagon’s Defense Logistics Agency. It follows export restrictions imposed on many of the materials by China, which dominates the supply chains for critical minerals and permanent magnets needed for technologies from smartphones to fighter jets.

“They [the US defence department] are incredibly focused on the stockpile,” said one former defence official. “They’re definitely looking for more, and they’re doing it in a deliberate and expansive way, and looking for new sources of different ores needed for defence products.”

Another former defence official said the $1bn is an acceleration over previous stockpiling efforts.

This week Beijing unveiled sweeping new export controls on rare earths and related technologies, prompting Donald Trump to say on Friday that he would no longer meet Chinese leader Xi Jinping later this month as planned.

The US would impose an additional 100 per cent tariff on Chinese imports in response, Trump said, adding: “There is no way that China should be allowed to hold the world ‘captive’ but that seems to have been their plan.” 

Beijing’s restrictions have fuelled fears in the US and Europe about their continued access to the metals.

Critical minerals are a national security priority for the Pentagon because they are crucial to virtually every weapons system, as well as technologies such as radar and missile detection systems. The defence department’s recent stockpiling activity is a marked acceleration driven by the Trump administration’s renewed enthusiasm for critical minerals. Some of the metals the Pentagon is seeking to acquire were not previously being stockpiled.

“China’s ability to turn off the supply of these critical minerals would have a direct, palpable and adverse effect on US ability to field the kind of high-tech capabilities that we’re going to need for any kind of strategic competition or conflict,” said Stephanie Barna, a lawyer at Covington & Burling in Washington.

Recent expressions of interest from the DLA include plans to buy up to $500mn of cobalt, up to $245mn of antimony from the domestic US Antimony Corporation, up to $100mn of tantalum from an undisclosed US company and up to a combined $45mn of scandium from Rio Tinto and APL Engineered Materials, a chemical manufacturing company based in Illinois that has offices in Japan and China.

The plans show that the US government was “conscious of how critical this stuff is, and wants to support whatever domestic capacity they have,” said one sector executive. “It’s very early days for western governments to stockpile critical minerals but they’re increasingly focused on it.”

The DLA stockpiles dozens of alloys, metals, rare earths, ores and precious metals, which are stored in depots throughout the country. Its assets were valued at $1.3bn as of 2023. The materials can only be released by the president in times of declared war, or if deemed necessary for national defence by the under-secretary of defence for acquisition and sustainment.

The price of germanium has soared this year as exports from China have fallen, with western traders warning of “panic” in the market as companies struggled to get hold of it. The germanium issue is one the Pentagon is trying to fix.

The price of antimony trioxide has almost doubled over the past 12 months, while carmakers have struggled to secure rare earth materials this year after China restricted certain exports.

Trump’s One Big Beautiful Bill Act contains $7.5bn for critical minerals, including $2bn to bolster the national defence stockpile which the Pentagon intends to spend by late 2026 or early 2027.

The OBBA also includes $5bn for defence department investments in critical minerals supply chains and $500mn for a Pentagon credit programme to spur investments.

One former defence official said several offices involved in securing the critical mineral supply chains were now “flush with cash” following the passage of the OBBA. 

The DLA declined to comment.

Analysts at Jefferies said the Rio deal, for around 6 tonnes of scandium oxide, was at a price that was “higher than market expectations”. Global consumption of scandium oxide is around 30-40 tonnes, according to price reporting agency Fastmarkets, with China the leading producer. 

The DLA stated in its filings that Chinese export controls on scandium had “constrained the supply chain”. 

The deal with USAC for antimony, meanwhile, would grow a stockpile “sufficient for industrial base mobilisation in a national emergency” and enable the company to continue producing in what was a “volatile” sector, it said.

USAC sources the mined material that it turns into metal from Canada, Mexico, Australia, Chad, Bolivia and Peru, chief executive Gary Evans told the FT. The company reported revenues of $15mn in 2024 and does not report its annual antimony metal production. The DLA deal for around 3,000 tonnes of antimony metal compares to total US antimony consumption in 2024 of 24,000 tonnes, according to the US Geological Survey.

“Market participants have been taken aback by the volumes requested by the DLA across several metals. Many consider the quantities to be unrealistic, especially within the proposed five-year timeframe,” said Cristina Belda, from Argus Media. “In most cases, the requested tonnages exceed the US’s annual production and import levels.”

The DLA has also sought information for the potential acquisition of rare earths, tungsten, bismuth and indium to add to the stockpile. 

The volumes of bismuth and indium were “significant” given the global size of the markets, said Solomon Cefai from Fastmarkets. “It is hard to imagine a situation where non-China supply would not be pressured by the volumes the DLA is looking at,” he said.

The DLA is seeking information for the potential acquisition of 222 tonnes of indium ingots, which compares to US consumption of refined indium of around 250 tonnes in 2024, according to the USGS.

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US banks are set for an unprecedented easing of capital rules, which new research suggests could unlock $2.6tn in lending capacity and increase pressure on regulators elsewhere to follow suit.

The upcoming dilution of US banking regulation, much of it already signalled by Washington, is likely to free up almost $140bn in capital for Wall Street lenders, according to research by consultancy Alvarez & Marsal.

Since Donald Trump returned to the White House, US authorities have embraced a much more bank-friendly approach, committing to loosen many of the rules that forced banks to increase their loss-absorbing capital buffers after the 2008 financial crisis.

The reduction of capital requirements is set to reinforce the dominant position of big Wall Street groups, boost their capacity to finance huge investments in AI and data centres and allow them to return more capital to shareholders.

“We think the Trump administration is kicking off a major wave of deregulation, unlocking a huge amount of capacity, which will give a massive economic boost and an earnings uplift,” said Fernando de la Mora, co-head of financial services at Alvarez & Marsal.

The New York-based consultancy predicted US banks would benefit from a 14 per cent reduction in their requirements for common equity tier one, a capital buffer that gives them capacity to absorb losses.

It forecast this would result in a 35 per cent boost to their earnings per share and a 6 per cent increase in their return on average tangible common equity — a benchmark used by investors.

The report, due to be published on Monday, provides detailed estimates of the impact of changes to banking regulation across the world. It forecast UK regulators would follow the lead of the US and reduce British banks’ capital requirements by about 8 per cent. 

However, it expects EU bank capital requirements to keep rising, predicting a 1 per cent increase, while capital levels for Swiss banks are forecast to rise by up to 33 per cent. The Swiss government has proposed higher capital levels that could require UBS to raise up to $26bn, as authorities seek to strengthen financial stability following the bank’s rescue of crisis-hit rival Credit Suisse.

“This is going to drive a further market share gain by US banks and the UK will just about hold its market share, while the Swiss and the EU banks will lose more ground,” said de la Mora.

JPMorgan Chase, the largest US bank, is set to be one of the main beneficiaries. The easing of restrictions is forecast to release $39bn of its capital, lifting its earnings per share by 31 per cent and its return on equity by 7 per cent.

Michelle Bowman, a longtime critic of stricter bank capital rules, was appointed this year as vice-chair of supervision at the US Federal Reserve and has since committed to ease restrictions that she has blamed for pushing lending into private credit markets.

US regulators have already presented proposals to water down requirements for banks to maintain a preset amount of high-quality capital in proportion to their overall assets. 

They have also announced plans to reform the extra capital buffers required of the biggest US banks and to rework the annual stress tests that impose more restrictions on them.

“There is a capital investment boom in the US to be financed — for AI, data centres, energy infrastructure and some reshoring,” said Huw van Steenis, vice-chair of consultancy Oliver Wyman. “This recalibration of regulation will help banks lean into this financing wave.”

However, European regulators worry about the risks of looser bank capital requirements. Christine Lagarde, the European Central Bank president, this month cautioned against “regulatory rollback”, while Bank of England governor Andrew Bailey warned about “the baby being thrown out with the bathwater” when reforming financial regulation.

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Elon Musk’s xAI is pushing to build so-called world models, joining rivals such as Meta and Google in the race to develop artificial intelligence systems that can navigate and design physical environments.

The San Francisco-based start-up hired specialists from Nvidia over the summer to work on these next-generation AI models, which train on videos and data from robots to understand the real world.

World models could push the capabilities of AI beyond that of the large language models, trained on text, that underpin popular AI tools such as ChatGPT and xAI’s Grok.

Two people familiar with the plans said the company was building world models with a view to applying them in gaming, where they could be used to generate interactive 3D environments. One of the people added that they could be applied to AI systems for robots.

xAI has hired Zeeshan Patel and Ethan He, two AI researchers from Nvidia with experience in world models. Nvidia has been a leader in developing this technology with its Omniverse platform, which creates and runs simulations.

Some tech groups have vast expectations of world models, which could unlock uses for AI beyond software and computers in physical products such as humanoid robots. Last month, Nvidia told the Financial Times that the potential market for world models could be almost the size of the present global economy. 

xAI would release a “great AI-generated game before the end of next year”, Musk said in a post on X, confirming a target the billionaire set last year.

On Tuesday, xAI launched its latest image and video generation model, which it said had “massive upgrades” and is free to use.

Current video generation models, such as OpenAI’s Sora, generate frames of images for videos by predicting patterns learned from training data.

World models would be a big advance as they would have a causal understanding of physics and how objects interact in different environments in real time.

The company is advertising for technical staff in both image and video generation to join its “omni team”, which “creates magical AI experiences beyond text, enabling understanding and generation of content across various modalities, including image, video and audio”.

Salaries for these jobs range from $180,000 to $440,000. It also has an open position for a “video games tutor”, who will train Grok to produce video games and enable “users to explore AI-assisted game design”, for $45 to $100 an hour.

Musk follows other leading AI labs, such as Google and Meta, that are also working on these systems.

However, world models remain a huge technical challenge. Finding sufficient data to simulate the real world and to train such models has proved difficult and costly.

Michael Douse, head of publishing at Larian Studios, which develops the video game Baldur’s Gate 3, said on X this week that AI could not solve the “big problem” for the games industry, which is “leadership [and] vision”.

He added that the industry did not need “more mathematically produced, psychologically trained gameplay loops [but] rather more expressions of worlds that folks are engaged with, or want to engage with”.

xAI, Patel and He did not respond to requests for comment.

Additional reporting by Hannah Murphy in San Francisco

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Rising demand for commercial aircraft will create space for rivals to challenge the Airbus-Boeing duopoly, according to the chief executive of Brazilian planemaker Embraer.

Francisco Gomes Neto said he saw the potential for new competitors to produce narrow-body jets, which at present are only built by the European and US companies.

“When I look at the projections for the next 20 years, we see an opportunity for 40,000 aircraft in that segment,” he told the Financial Times at the company’s headquarters in São José dos Campos. “That’s a lot. I think there is room for more than two manufacturers, right? I mean, maybe three or four.”

Embraer is the world’s third-biggest planemaker and dominates the smaller regional jets that carry fewer than 150 passengers, although its output is far behind industry giants Airbus and Boeing. 

The $10.6bn group has been studying options for the next generation of its commercial and business jets but Gomes Neto said a decision was not due until the next decade at the earliest because it was focused on selling existing products. Embraer’s latest and largest model, the E195-E2, can carry up to 146 passengers.

Recent crises at Boeing and late deliveries of aircraft from both the US manufacturer and Airbus amid persistent supply chain problems have fuelled talk of whether Embraer might be tempted to enter the single-aisle market.

Gomes Neto said some of Embraer’s customers “say that they would like to have more options”. However, he cautioned that there was a “big gap” between saying something and buying something. 

Ron Epstein, a Bank of America analyst, believes there is a case for Embraer to develop a larger aircraft.

“The big question for them is strategically what do they do next?” he said. “Look out over the next 20 years at demand for commercial aircraft and I think almost for sure there’ll be room for a third player,” he added, noting that Boeing’s crises had reminded airlines that “having another player in the market is good for everybody”.

Embraer, Epstein said, was one of the few companies that could “bring a new product to market relatively cost-effectively”.

Gomes Neto’s comments echo those of executives at Boeing and Airbus, who have said no decisions on whether to launch a new single-aisle jet are imminent. Both are focused on delivering on orders for their existing narrow-body models — Airbus’s best-selling A320 family of jets this week overtook Boeing’s 737 as the most popular commercial aircraft in history by deliveries, according to industry data.

Industry executives believe China’s Comac is the most likely to disrupt the dominance of Boeing and Airbus. The state-owned company launched its first domestically made airliner, the C919, in 2023 and its customers include the country’s three biggest carriers as well as a few overseas airlines.

Going head-to-head with Airbus and Boeing would be a risky endeavour for Embraer. A past attempt by Bombardier to break into narrow bodies almost proved ruinous, leading the Canadian manufacturer to withdraw from commercial aircraft production and focus on business jets. 

Gomes Neto said Embraer would not want to put the company’s “financial health” at risk. Embraer plans to almost double revenues from its existing regional and business jets, with a target of reaching $10bn by the end of this decade. 

The company is enjoying strong demand for its regional jets despite being subject to the Trump administration’s baseline 10 per cent import tax in its biggest market. It successfully lobbied Washington for an exemption from the additional 40 per cent tariff imposed on Brazil two months ago, with Gomes Neto meeting the US treasury, commerce and transportation secretaries to press its case. 

Even so, Gomes Neto said the 10 per cent duty would add about $80mn in costs to the group, chiefly resulting from the import of parts for its private jets that are assembled in Florida. He expressed optimism that the remaining tariff would be removed from Brazilian aerospace goods. Adjusted half-year earnings before interest and tax were $253.8mn.

Embraer has not been immune from the industry’s supply chain challenges. Gomes Neto said deliveries of components such as engines and fuselage parts were still delayed but that the situation was improving, and the company was still on track to reach 100 commercial aircraft deliveries per year by 2028.

He added that the group was pursuing several international sales opportunities for its regional jets, including in India. 

The company is also seeking to boost overseas sales of its military products, including the KC-390 Millennium tanker-transport aircraft, and hopes to benefit from higher military spending from Nato countries. Eight European countries have so far ordered the KC-390. 

Embraer is working on plans to assemble the KC-390 in the US as part of a bid to win a contract with the US Air Force for the Next Generation Air Refuelling System programme. 

Separately, Gomes Neto said he expected the company’s electric air taxi, Eve, to enter commercial service by the end of 2027. The subsidiary, which is seen as a key potential growth area for Embraer, is among several companies developing battery-powered aircraft that can land and take off vertically to take passengers on short-range trips.