Boeing Dodges Junk Rating From S&P On Production Recovery — Retail’s Bullish

Another downgrade would have raised the borrowing costs for the planemaker, which already has a consolidated debt of $53.6 billion.

S&P Global Ratings removed Boeing's (BA) rating from CreditWatch Negative on Monday, implying it no longer wanted to cut the planemaker's rating to junk status.

The ratings agency reportedly cited Boeing's improving production levels and cash balance as the reason behind the decision.

Another downgrade would have raised the borrowing costs for the planemaker, which already has a consolidated debt of $53.6 billion.

S&P had placed Boeing on CreditWatch Negative after a strike by more than 30,000 workers had compounded the planemaker's troubles the previous year. It was already reeling from investigations of a mid-air incident involving one of its bestselling Max jets.

The company's first-quarter free cash flow improved to a negative $2.3 billion from a negative $3.9 billion a year earlier.

Boeing is slowly ramping up production and will likely request the Federal Aviation Administration lift a 38-per-month production cap on its bestselling 737 Max jets.

"We estimate that Boeing has increasing capacity to absorb unexpected headwind risks to sustainably higher production and to near-term aircraft deliveries, including those posed by tariffs and counter-tariffs with the U.S. and its trading partners," S&P reportedly said.

China has reportedly asked domestic airline firms not to accept Boeing deliveries amid the ongoing trade war with the U.S. Boeing had sounded confident about rerouting China-bound planes to different buyers.

It had a total company backlog of $545 billion at the end of the quarter.

However, S&P maintained a negative outlook on the company's ratings, signaling that a potential downgrade could still occur in the medium term.

Retail sentiment on Stocktwits was 'bullish' (65/100), while retail chatter remained 'high.'

One user said that the company could see growth for years to come.

https://stocktwits.com/BlueFir/message/612925660 

Boeing shares have gained 2.2% year-to-date (YTD).

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