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Investing.com -- S&P Global Ratings has revised Boeing Co.’s (NYSE:BA) outlook to stable from negative while affirming its ’BBB-’ rating, citing the aircraft manufacturer’s improving production capabilities.
Boeing is increasing its 737 MAX production to 42 planes per month after maintaining a rate of 38 per month for several months. The company has met key consistency metrics in manufacturing, with supply chain improvements reducing out-of-sequence work and rework.
The production increase follows a joint agreement with the Federal Aviation Administration in October. Boeing plans to further increase production to 47 planes monthly in 2026. Its widebody 787 production remains stable at seven per month, with plans to reach 10 monthly by the end of next year.
Deliveries gained momentum in the third quarter, with 121 MAX and 24 787 planes delivered. Boeing has largely cleared its inventory of planes completed before 2023, freeing capacity for new production.
S&P views the MAX manufacturing recovery as crucial for Boeing’s return to profitability and positive free cash flow. The company’s defense segment is also showing signs of recovery, reporting a 1.7% operating margin with no new charges in the quarter.
However, Boeing faces challenges, including a delayed start of 777X deliveries now scheduled for 2027, a year later than planned. The company recorded a $4.9 billion non-cash charge in the third quarter of 2025 related to this delay.
S&P now estimates Boeing’s 2026 free operating cash flow at about $3 billion, at least $2 billion lower than previously forecast, mainly due to working capital build-up and customer concessions.
Boeing ended the third quarter with $23 billion in cash and investments, reflecting its $24.3 billion equity raise in October 2024, reduced by subsequent free cash usage and $4 billion in debt repayments.
The company’s commercial backlog totals $535 billion, representing more than 5,900 planes, with Boeing effectively sold out through the end of this decade.
S&P expects Boeing’s funds from operations to debt ratio to approach 20% and free operating cash flow to debt to exceed 10% in 2026, with potential for significant improvement beyond next year.
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