Boeing shares fall for a third straight session on Monday, EU antitrust regulator may probe Boeing’s bid for Embraer arm

According to a Monday report by Reuters, citing sources with knowledge of the matter, the EU antitrust regulator may launch a probe into Boeing Co’s (BA) bid for a controlling stake in Embraer’s commercial aircraft business.

Boeing shares closed lower for a third consecutive trading session in New York on Monday. The stock went down 0.62% ($2.36) to $377.03, after touching an intraday low at $374.63, or a price level not seen since September 12th ($374.31).

Shares of Boeing Company have risen 16.91% so far in 2019 compared with a 19.34% gain for the benchmark index, S&P 500 (SPX).

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

Last year the two companies announced that the joint venture, which is to include Embraer’s commercial jet business only and not its defense and business jet operations, would lead to the establishment of a new entity, where Boeing would own a stake of 80.01%, while the Brazilian plane maker – a stake of 19.99%.

The deal, which values Embraer’s commercial aircraft arm at $4.75 billion, is expected to boost Boeing’s presence in the lower end of the market and to make it more competitive against the CSeries jets designed by Bombardier Inc and backed by Airbus SE.

Having set a deadline for its preliminary review of the deal until October 4th, the European Commission will embark on a full-scale investigation after the review is complete. The probe may take up to five months.

There have been concerns in regard to the concentration in the market, since the EU regulatory authority has recently polled Boeing’s suppliers and competitors on the deal. Respondents in the poll were asked about the potential effect resulting from the smaller number of players in the market – from 7 to 6 and from 3 to 2 in various segments, one of the sources told Reuters.

Analyst stock price forecast and recommendation

According to CNN Money, the 20 analysts, offering 12-month forecasts regarding Boeing Company’s stock price, have a median target of $425.00, with a high estimate of $500.00 and a low estimate of $367.00. The median estimate represents a 12.72% upside compared to the closing price of $377.03 on September 23rd.

The same media also reported that at least 12 out of 23 surveyed investment analysts had rated Boeing Company’s stock as “Buy”, while 9 – as “Hold”.