Monday - Stifel has updated its stock price target for Spirit AeroSystems (NYSE:SPR) to $37.25 from the previous $34.00, while keeping a Hold rating on the stock. The adjustment follows the announcement of Boeing (NYSE:BA)'s intention to purchase all outstanding shares of Spirit AeroSystems at a price of $37.25 per share through a stock transaction.
The acquisition by Boeing is not anticipated to be finalized until 2025. Stifel's analyst notes that there is not expected to be any competition for the deal. According to the firm, it is likely that the shares of Spirit AeroSystems will trade below the offer price until the deal is near completion due to factors such as the current cost of capital and the regulatory review process.
The analyst believes that despite the potential fluctuation in Spirit AeroSystems' share price leading up to the closure of the deal, the transaction is expected to be successfully completed at the stated price. The deal is set to take place in a context where regulatory considerations play a significant role, and the cost of capital is an influential factor for the trading price.
Spirit AeroSystems' new price target is directly aligned with the terms of the proposed acquisition by Boeing. Stifel's analysis suggests that the stock will likely remain under the acquisition price in the short term, adjusting as the deal approaches its conclusion.
Investors and market watchers are provided with a timeline and expectations for the trading behavior of Spirit AeroSystems shares leading up to the deal's expected closure in 2025. The firm's stance remains neutral with a Hold rating, indicating a watchful approach as the acquisition process unfolds.
In other recent news, Boeing is negotiating the implications of a guilty plea to a charge of criminal fraud conspiracy with the U.S. Defense Department. This plea could impact the company's ability to secure future government contracts, a major revenue source for Boeing.
The charge is related to two fatal crashes involving its 737 MAX aircraft, leading to a fine of $243.6 million. The plea agreement also requires Boeing to spend at least $455 million over the next three years to enhance safety and compliance processes.
Simultaneously, Boeing is dealing with the fallout from a U.S. Justice Department probe into the 737 MAX crashes, which resulted in 346 deaths. As part of this settlement, the company has agreed to pay another fine of $243.6 million and invest a minimum of $455 million over the next three years to enhance its safety and compliance programs.
Furthermore, Boeing's proposed acquisition of Spirit AeroSystems and the scheduled departure of CEO Dave Calhoun at the end of 2024 are other recent developments to note.
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