We knew that aerospace stock Boeing (BA) was planning some kind of measure to raise cash for some time now, though it was not immediately clear how or how much. Those questions have now been partially answered in the form of a planned $10 billion stock sale. Despite concerns that Boeing shares were about to be heavily diluted, Boeing shareholders were happy to see some movement and sent share prices up over 2% in Tuesday afternoon’s trading.
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Boeing will look to sell at least $10 billion in new shares, based on a set of regulatory filings that recently emerged. But it may not stop at $10 billion, and could ultimately go as high as $25 billion over the course of the next three years. Not all of that $25 billion may be stock, however, as Boeing may also take advantage of its credit rating—while it still has it, anyway—to issue debt.
Further, Boeing plans to turn to its current lenders for some new credit agreements that will hopefully buy it a bit of breathing room since it is unable to sell much due to the strike already in progress. Boeing noted that it finished out September with $10.3 billion in cash and equivalents in its coffers, but that is apparently close to the minimum it actually needs to operate.
Whose Jobs Are Getting Cut?
Meanwhile, further reports emerged about the nature of Boeing’s massive layoff plan. The Seattle Times noted that the cuts will not be focused very hard on those who are currently on strike: the blue-collar machinists. No, most of the cuts will be falling on the executive and managerial classes.
Moreover, all the layoffs will be involuntary. Thus, there will be no severance packages for those who volunteer to walk away. The first phase will start on November 13 and should be completed by November 15, with 60-day notices to follow notifying workers that their jobs will be completely removed on January 17.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 14 Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 17.51% loss in its share price over the past year, the average BA price target of $202.11 per share implies 32.62% upside potential.
