Moody’s reviews Boeing for downgrade

Moody's Ratings said it placed the Baa2 senior unsecured rating of Boeing Co. on review for downgrade. The outlook was previously stable.

The agency said it believes Boeing will not deliver the 737 narrow-body aircraft at the volumes required for it to expand its free cash flow and retire debt in a reasonable timeframe.

“The aftereffects of the door plug ejection on Alaska Airlines flight 1282 on Jan. 6, 2024, and investments in components and parts inventory in an attempt to reduce traveled work in the production of 737s will result in about $4.5 billion of negative free cash flow in the first quarter. Cash will fall well below $10 billion come March 31, 2024.

“On March 20, 2024, Boeing's CFO stated that the company expects free cash flow in the low single digits for 2024. In September 2023, Moody's projected 2024 free cash flow of $6.9 billion. Based on the company's guidance, Moody's now projects about $1 billion of free cash flow for 2024,” the agency said in a press release.

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