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Investing.com -- Fitch Ratings has revised Boeing’s (NYSE:BA) outlook to Stable from Negative while affirming the company’s Long-Term Issuer Default Rating (IDR) at ’BBB-’, according to a rating action announced Monday.
The outlook revision reflects Fitch’s view that Boeing’s post-strike production ramp and enhanced financial flexibility have reduced downgrade risks. The ratings agency specifically cited the announced $10.55 billion sale of Jeppesen to Thoma Bravo as a factor supporting the ’BBB-’ rating.
Fitch expects Boeing to reduce its gross debt, including repayment of all 2026 notes at maturity, which total $7.95 billion. The agency noted that sustained operational improvements, particularly continued 737MAX production progress, should drive free cash flow generation and EBITDA leverage metrics consistent with ’BBB-’ thresholds.
Boeing has increased 737MAX production to the mid-30s per month and is targeting 38 per month during the third quarter of 2025. Fitch expects 787 production to average eight per month in 2026, up from an average of six in 2025.
The aircraft manufacturer has been reducing legacy inventory by delivering 10-15 parked aircraft each month. Fitch anticipates this will facilitate a return to more normalized production-to-delivery cadence, driving improvements in working capital and enabling annual free cash flow generation in the mid-to-high single-digit billions by 2026.
Boeing’s $24 billion equity issuance in late 2024 strengthened its balance sheet, while its robust liquidity position of approximately $34 billion in proforma cash and short-term investments as of March 31, 2025, provides additional financial flexibility.
The company’s total backlog exceeded $545 billion as of March 31, 2025, with approximately $460 billion tied to commercial customers. This includes orders for over 5,600 aircraft, of which more than 4,300 are 737s.
Fitch forecasts Boeing’s EBITDA leverage to improve to below 4.0x in 2026 and 3.0x in 2027. The agency expects gross debt to fall below $50 billion in 2026.
The ratings agency noted that Boeing’s Defense, Space & Security segment remains weighed down by loss-making legacy contracts, particularly in fixed-price development, fighter, and satellite programs, which represent about 40% of the portfolio.
Fitch indicated that greater clarity around Boeing’s capital spending and allocation priorities, particularly regarding the new U.S. Air Force F-47 program and 2027 debt maturities, would further strengthen its credit profile.
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