Tuesday, February 4, 2020

Textron Inc owner of aircraft brands; Cessna, Hawker and Beechcraft may have a new addition to their lineup, Bombardier. (Reuters) – Canada’s Bombardier Inc is in talks to sell its business-jet unit to U.S. manufacturer, Textron Inc (NYSE:TXT), the Wall Street Journal reported, citing people familiar with the matter.

The Deal

The business deal is in conversation between the two transportation manufacturers in aims for Bombardier to eliminate some existing debt. Their main focus in trains and commercial airlines is the key elements of their business. Over the last year shares of bombardier have been on the decline. With a growing debt the team is looking for opportunities to sell off portions of their existing business, specifically their business jet line.

This would include aircraft in the Learjet, the Challenger, and Global lineup. Introduction of aircraft such as the Global 7500 would put Textron in direct competition with large cabin manufacturers like Gulfstream and Embraer.

Textron to date holds the record for currently having the largest diversity and variety in models. With the addition of Bombardier’s business jets it would lock in their place as having the most aircraft in Textron’s portfolio.

We have yet to hear any official remarks from Bombardier regarding the deal. The completion of the deal would drive up GDP for the United States as the Bombardier fleet is highly demanded worldwide. This would allow for Textron to incorporate their existing systems and structure to better provide for their growing client database.

Technical Analysis

Textron Shares are up a total of 8% today with great optimism for the growing market of business jets. Over the last year Textron has been in a sideways trending wedge. Price has been in a downwards direction making lower highs and lower lows over the last year.

On the recent release of the news today we are seeing a sharp bullish candle engulfing the previous resistance levels from the ends of last year. The pattern leading up to the sharp bullish candle starts to signal some strength as we broke up above the previous support level and tested up before making our impulsive push up.

Naturally many would be looking to see a slight pullback or retracement form this quick move upwards. Although from our previously drawn trend lines we can see that there is a zone that we are currently testing. Pushing up above the zone and testing above would create a new support level and would lead investors to look towards Textron making new highs.

In the same event this impulsive move is hinged based on the conversation of the potential business acquisition. Should the deal be prolonged or potentially cancelled this would negatively affect the stock as a result and could lead to a continuation of the overall downtrend.

Based on the 52-week history we are in the lows of the market range which is incredible appealing for investors looking to open a long position.

Having Textron on your Aviation Stock Watch-list is a must. They are a leader in the business aviation industry in their portfolio of options and their service.

As always make sure you understand the risk associated with investing in financial markets and consult your license financial adviser for more info. Air Market Group is driven on being your source of education and information for your investing in the aviation industry.

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Disclosures
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options: https://www.theocc.com/components/docs/riskstoc.pdf

Air Market Group content is provided solely by Air Market Group LLC and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. Air Market Group, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Air Market Group is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. Multi-leg option strategies incur higher transaction costs as they involve multiple commission charges. Air Market Group is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

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