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
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical TensionThe main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's ChromeAlphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical Tension
The main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
-
What's at Stake for Alphabet as DOJ Eyes Google's Chrome
Alphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
-
Lowe's Stock Is Falling After Earnings. Here's WhyLowe's stock is lower Tuesday as Wall Street weighs a beat-and-raise quarter against declining revenue. This is what you need to know.
-
Why Walmart Stock's a Buy After Its Beat-And-Raise QuarterWalmart is the best Dow Jones stock Tuesday after the retail giant's solid earnings report and outlook and Wall Street thinks it's just getting started. Here's what they're saying.
-
Winners and Losers of Fed Rate CutsNavigating interest-rate changes can seem daunting, but these areas of the fixed-income market could perform better (or worse) than others.
-
Six Ways to Optimize Your Charitable Giving Before Year-EndAs 2024 winds down, right now is the time to look at how you plan to handle your charitable giving. The sooner you start, the more tax-efficient you can be.
-
How Preferred Stocks Can Boost Your Retirement PortfolioHigher yields, priority on dividend payments and the potential for capital appreciation are just three reasons to consider investing in preferred stocks.
-
Structured Settlement Annuity vs Lump-Sum Payout: Which Is Better?As the use of structured settlement annuities grows, it can be tough to decide whether to take the lump sum to invest or opt instead for guaranteed payments.
