Key Takeaways
- Wells Fargo warned about Boeing’s free cash flow and downgraded the stock.
- Analyst Matthew Akers also slashed the price target to $119 from $185.
- Akers said the bank expects Boeing’s free cash flow to peak in 2027.
Boeing (BA) shares tumbled Tuesday after Wells Fargo downgraded the stock on concerns about the plane maker’s long-term free cash flow (FCF).
The bank lowered its rating to “underweight” from “equal weight,” and slashed its price target to $119 from $185.
Analyst Matthew Akers pointed to Boeing’s “extensive delays and added cost” impacting aircraft production cash flow. Akers said Wells Fargo’s “deep dive into FCF drivers through 2030 shows cash peaking in 2027 at or below BA’s prior $10B target. Our FCF estimates are 15-20% below consensus in 2026-27.”
Wells Fargo Notes Boeing’s $45B in Debt
Akers noted that the company has $45 billion in debt on its balance sheet, and “we estimate paying this down would consume all of its cash through 2030.”
In addition, Akers warned that Boeing faces a series of risks in the coming years, including upcoming union negotiations, the planned integration of supplier Spirit AeroSystems Holdings (SPR), “softening airline yields,” and technical issues with its 777X and Starliner jets.
Shares of Boeing sank almost 9% in late-morning trading to $158.64, their lowest level in nearly two years.