Boeing (BA, Financial) faces a significant threat to its credit rating from S&P due to an ongoing strike. The credit rating agency warns that Boeing could be downgraded to junk status. The strike is costing Boeing an estimated $1 billion per month. S&P expects Boeing to burn through $10 billion in cash by 2024, assuming the strike concludes in the fourth quarter. As a result, the company's year-end cash balance is expected to be below its target of $10 billion.
Boeing currently holds a "BBB-" issuer credit rating. S&P also notes that Boeing is seeking additional financing and may issue more equity. The company still faces the risk of higher-than-expected cash usage and adjusted debt over the next couple of years. This could further delay the anticipated recovery of its credit metrics to levels consistent with its current rating.
Additionally, S&P projects that Boeing's goal to produce 38 units of the 737 MAX monthly might not be achieved until mid-2025.
