Fitch Ratings has revised Boeing’s Long-Term Issuer Default Rating (IDR) outlook from Positive to Stable, citing further delays in the 787 program, as per Cbonds. The IDR stays at ‘A+’ with a stable outlook. Fitch has also confirmed Boeing’s other ratings, such as Senior unsecured debt at ‘A+’, Bank facilities at ‘A+’, Short-Term IDR at ‘F1’, and Commercial paper programs at ‘F1’.
Fitch expects Boeing to deliver between 420 and 450 737MAX aircraft in 2024, a decrease of approximately 100 from previous forecasts. This revision in outlook indicates that Boeing’s timeline to achieve positive indicators is likely to be delayed by around 12 months compared to earlier expectations.
Fitch projects that Boeing possesses the financial capacity to endure both the present 787 delays and any further setbacks that may arise. The primary financial consequence of these delays is anticipated to stem from a significant increase in working capital, which is expected to normalize upon the commencement of deliveries. While Fitch foresees Boeing incurring penalty payments to customers, these are projected to be relatively minor compared to the accumulation of working capital.
Even with the setback in the 787 program, Boeing maintains robust credit quality and is poised to navigate through the obstacles presented by the delays. The stable outlook signifies Fitch’s anticipation of Boeing’s credit ratings persisting at their current level in the foreseeable future, offering a favorable indication for investors and stakeholders.
In summary, Fitch’s adjustment of Boeing’s Long-Term IDR outlook from Positive to Stable mirrors the influence of further delays in the 787 program on the company’s growth projections. Nonetheless, Boeing’s robust credit metrics, successful performance in alternative aircraft programs and defense sectors, and financial resilience to confront the delays underscore the company’s stability and favorable standing within the industry.
