So the contract talks between aerospace company Boeing Co. (BA) and its striking machinists are not going well. They’re going so not well, in fact, that Boeing has withdrawn its latest contract offer and walked away from negotiations for the time being. That news has BA stock trading down 3%.
Boeing’s latest offer featured a 30% pay raise for striking machinists to be delivered over the course of four years. But that offer is now officially off the table. The union revealed that it had “surveyed its members” after said offer was received, and “…it was rejected overwhelmingly.”
Boeing subsequently tried to take the moral high ground, declaring “…the union did not seriously consider our proposals…..” Further, Boeing noted, “…the union made non-negotiable demands far in excess of what can be accepted if we are to remain competitive as a business.”
Boeing’s Efforts to Raise Cash
Meanwhile, Boeing still finds itself in a cash crunch, and things are about to get worse. A report from Bloomberg detailed a good chance that S&P Global Ratings was prepared to drop Boeing’s credit rating to “junk” status as it continues to grapple with the strike.
There is some hope. Boeing has reportedly received several proposals from banks, including JPMorgan Chase (JPM) and Bank of America (BAC), who have offered possibilities for various fundraising activities. Common stock sales, mandatory convertible bonds, and preferred equity have all been advanced as options, according to a report from Reuters. One of the sources, the report noted, suggested Boeing aim for around $10 billion in the fundraising.
Is Boeing Stock a Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, four Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 22.27% loss in its share price over the past year, the average BA price target of $206.11 per share implies 37.06% upside potential.
