On Tuesday, Goldman Sachs maintained a Buy rating and a $202.00 price target for Boeing (NYSE:BA).
The aerospace giant, currently grappling with a strike by IAM workers, is anticipated to swiftly resolve the issue and resume its aircraft production and delivery pace. Prior to the strike, Boeing had seen an uptick in deliveries, with September showing particularly strong performance.
The analyst from Goldman Sachs noted that while Boeing is facing a balance sheet dilemma, the company has hinted at the possibility of raising capital to preserve its credit rating. It is presumed that Boeing will secure $12 billion in equity before the end of the year, aligning with the total debt maturities for 2025 and 2026.
This move is expected to sustain Boeing's cash balance above $10 billion in the short to medium term as it escalates commercial deliveries and addresses defense profitability challenges.
Boeing's management has recently communicated during an intra-quarter conference that the defense segment is likely to report losses in the third quarter of 2024, similar to those experienced in the second quarter. In response to these setbacks, leadership changes have been implemented within the defense segment.
"While BA continues to face several challenges to work through near-term, we see attractive valuation relative to long-term fundamentals and are Buy rated on the stock," said Goldman Sachs analysts in a note to clients.
In other recent news, the Federal Aviation Administration (FAA) is set to overhaul its safety management system and hold Boeing accountable for its manufacturing processes. This commitment to safety enhancement follows a series of production quality issues experienced by the company.
InvestingPro Insights
Boeing's current financial landscape presents a mixture of challenges and potential, as reflected in the latest data from InvestingPro. With a market capitalization of $96.31 billion and a negative P/E ratio of -27.8, investors are cautious about the aerospace giant's profitability. The company's revenue has seen a slight decline of 0.07% over the last twelve months as of Q2 2024, and gross profit margins are relatively weak at 10.46%, underscoring the financial pressures Boeing is facing.
InvestingPro Tips suggest that Boeing may struggle with making interest payments on its debt and analysts have revised their earnings downwards for the upcoming period, indicating potential headwinds. Yet, it remains a prominent player in the Aerospace & Defense industry. Notably, Boeing is trading near its 52-week low and does not pay a dividend to shareholders, which could influence investment decisions. For investors seeking a more in-depth analysis, there are over 10 additional InvestingPro Tips available at https://www.investing.com/pro/BA, providing a comprehensive outlook on Boeing's financial health and future prospects.
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