Fitch raises Boeing's outlook to stable as finances, production improve

Global ratings agency Fitch on Monday revised its outlook on US planemaker Boeing to 'stable' from 'negative' and affirmed its 'BBB-' rating, citing improved financial flexibility and production. 

The revision in outlook comes as a relief for Boeing, which has resolved its labor dispute and is undergoing a broader transformation under current CEO Kelly Ortberg. 

Major ratings agencies had last year warned of a possible downgrade after a strike by about 33,000 workers halted production of Boeing's best-selling jets. 

Fitch now expects Boeing to reduce its gross debt below $50 billion in 2026 by repaying notes worth $7.95 billion maturing in that year, following a production ramp-up after the strike and the sale of its Jeppesen unit. 

 

"Sustained operational improvements, particularly continued 737 MAX production progress, should drive FCF (free cash flow) generation and EBITDA leverage metrics consistent with 'BBB-' thresholds," Fitch said in its report. 

The ratings agency said it will monitor Boeing's ability to sustain operational momentum and offer clearer guidance on long-term capital allocation, which could support a rating upgrade in six to 12 months. 

It also expects Boeing's management to continue reviewing its defense portfolio and sell non-core assets.

In April, S&P had removed Boeing's rating from CreditWatch negative on improving aircraft production and lower cash burn.  A CreditWatch listing reflects the increased likelihood of a downgrade.