Shares of Boeing soared 5.6% on Wednesday after CFO Greg Smith said that the $25 billion in debt raised in April will be enough to help the planemaker navigate through the global aviation crisis. Travel restrictions tied to the COVID-19 pandemic have taken a toll on the aerospace industry, causing airlines to rethink their growth plans. This is impacting the demand for new aircraft.
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According to a Reuters report, Boeing’s (BA) Smith said during a conference arranged by Jefferies, that paying down debt and strengthening the balance sheet is “priority one” for now.
Separately, S&P Global Ratings cut its outlook on Boeing to “negative” from “stable” on Wednesday. The credit rating agency cited uncertainty over a recovery in the aerospace industry due to COVID-19.
Earlier, Wolfe Research analyst Hunter Keay downgraded Boeing to Sell from Hold. In a research note, Keay stated that “Boeing will face more MAX [aircraft] cancellations and is increasingly concerned about demand for widebody aircraft.”
Overall, BA has a Moderate Buy analyst consensus. The average price target of $187.63 implies upside potential of about 7.7%. (See BA stock analysis on TipRanks).
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