Boeing shares close higher on Friday, company could take over Embraer’s entire commercial aviation business, Brazil’s Bolsonaro says

January 7, 2019 10:10 am

Brazil’s President Jair Bolsonaro expressed concerns on Friday that the acquisition of 80% of Embraer’s commercial aircraft and services operations by Boeing Co (BA) could result in a complete takeover of the division by the US plane manufacturer.

Boeing shares closed higher for the fifth time in the past eleven trading sessions in New York on Friday. It has also been the sharpest daily surge since December 26th. The stock went up 5.20% ($16.18) to $327.08, after touching an intraday high at $328.43, or a price level not seen since December 19th ($333.48).

Shares of Boeing Company have surged 1.42% so far in 2019 compared with a 1.00% gain for the benchmark index, S&P 500 (SPX).

In 2018, Boeing’s stock rose 9.36%, thus, it again outperformed the S&P 500, which registered a 6.24% loss.

According to the finalized terms of the agreement, which the two plane makers announced in December, Embraer would be able to sell its 20% stake in the commercial division to Boeing Co within the upcoming 10 years for approximately $1 billion (depending on adjustments for inflation).

After the 10-year period expires, the Brazilian plane maker’s stake could still be sold, but however, this could be done at fair value.

According to Brazil’s Bolsonaro, though the merger “would be good”, the proposed partnership between the two companies could lead to Embraer “passing to the other side.”

“That’s our concern,” Bolsonaro was quoted as saying by Reuters. “(Embraer) is our patrimony,” he pointed out.

According to CNN Money, the 20 analysts, offering 12-month forecasts regarding Boeing Company’s stock price, have a median target of $428.32, with a high estimate of $515.00 and a low estimate of $330.00. The median estimate represents a 30.95% upside compared to the closing price of $327.08 on January 4th.

The same media also reported that 14 out of 22 surveyed investment analysts had rated Boeing Company’s stock as “Buy”, while 5 – as “Hold”.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Boeing Co (BA) are presented as follows:

Central Pivot Point – $321.67
R1 – $333.84
R2 – $340.60
R3 – $352.77
R4 – $364.94

S1 – $314.91
S2 – $302.74
S3 – $295.98
S4 – $289.22

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