The U.S.-listed shares of Brazil-based Embraer S.A. ERJ, -8.97% EMBR3, -13.80% tumbled 10% in active afternoon trade Thursday, after the company announced plans to form an aerospace-focused joint venture with Boeing Co. BA, +0.14% in which Boeing would own 80% of the JV. Embraer’s stock was the biggest percentage declining trading on the NYSE Thursday, while volume of over 4.9 million shares was already about 5-times the full-day average. Analyst Robert Stallard at Vertical Research Partners said he calculates Boeing is paying about 8.5-times earnings before interest, taxes, depreciation and amortization (EBITDA) for its 80% stake in the JV. “This is significantly lower than earlier press reports have suggested, and of course excludes cost synergies that Boeing should be able to achieve down the line, particularly through the combined supply chain,” Stallard wrote in a note to clients. Boeing’s stock eased 0.2%. Year to date, Boeing’s stock has run up 13% while Embraer shares have slipped 1.8% and the Dow Jones Industrial Average DJIA, +0.59% has eased 1.8%.
Embraer's stock falls to pace NYSE decliners after JV deal with Boeing
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