Boeing (BA) filed to raise up to $25 billion through a combination of stock and debt offerings and entered into a $10 billion supplemental credit agreement with lenders. The move comes as the company attempts to shore up its balance sheet amidst ongoing strikes at its West Coast factories.
While Boeing filed to raise up to $25 billion, analysts estimate that it needs to bring in at least $10 billion and $15 billion, according to Reuters. This would allow the company to maintain its credit ratings, which are just one notch above junk, it added.
"These are two prudent steps to support the company's access to liquidity," Boeing said in a statement to Reuters. "This universal shelf registration provides flexibility for the company to seek a variety of capital options as needed to support the company's balance sheet over a three-year period."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Previously, Boeing was reportedly working with its advisers to raise at least $10 billion.
Boeing reports preliminary results and layoffs
On Friday, Boeing released its preliminary third-quarter results, which included a net loss of $9.97 per share, a cash burn of $1.3 billion and an ending balance of cash and marketable securities of $10.5 billion.
In a separate release, Boeing announced that it would reduce the size of its total workforce by roughly 10%, or about 17,000 people.
"Our business is in a difficult position, and it is hard to overstate the challenges we face together," said new Boeing CEO Kelly Ortberg in a statement. "Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term."
Is BA stock a buy, sell or hold?
Boeing has been one of the worst Dow Jones stocks in 2024, down nearly 42% for the year to date. Yet, Wall Street remains bullish on the the large-cap stock.
According to S&P Global Market Intelligence, the average analyst target price for BA stock is $199.88, representing implied upside of nearly 32% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm UBS Global Research lowered its price target on BA stock to $215 from $220 but maintained its Buy rating after the preliminary results were released.
"Boeing announced preliminary Q3 results and a number of business and operational updates," wrote UBS analyst Gavin Parsons on October 14. "In short: we believe cost rightsizing and a narrower focus are necessary steps, but highlight the long road to recovery. Less cash burn in Q3 gives Boeing slightly more flexibility on liquidity than expected, but cost-out steps also suggest labor contract negotiations could extend."
Related content
-
Buffered ETFs for a Rocky MarketBuffered ETFs provide protection during market downturns, but in exchange, your gains are capped.
-
Time to Spring-Clean Your Finances: A Financial Professional's Four Steps to Tidy Them UpA midyear review of everything from spending to saving, with adjustments as needed, can set you on track to financial security. Plus, don't forget to check in on your workplace benefits.
-
Why a Law Firm Secretly Recording Client Conversations Is Wrong (and Illegal)A law firm that has been recording client conversations without the clients' knowledge or permission and has threatened employees if they speak out faces legal and ethical challenges.
-
Stock Market Today: Markets Discount Another U.S. DowngradeAfter Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
What's Next for Stocks After a Chaotic SpringA chaotic tariff policy buffets investors looking for clarity on the economy and inflation.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
