Boeing Price Targets Cut in Wake of $14 Billion Loan Draw-Down

Boeing analysts at Barclays, Canaccord and JPMorgan commented on the Chicago aerospace giant's nearly $14 billion loan draw-down and a couple of them cut their price targets on the shares.
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Boeing  (BA) - Get Report is reportedly fully drawing down its nearly $14 billion loan facility over the near term, and analysts at Barclays, Canaccord and JPMorgan on Thursday all published notes on the company. 

Barclays forecast that Boeing will use $2 billion to $3 billion of free cash flow in both the first and second quarters due to the halt in 737 MAX deliveries and the support Boeing has pledged to its supply chain. 

The Chicago aerospace company last month obtained the loan facility from a group of banks as it works to return the 737 MAX jetliner to service. The 737 MAX was grounded worldwide following two fatal crashes in October 2018 and March 2019. 

Along with the company's $1 billion quarterly dividend, Barclays estimates that Boeing will need about $4 billion in new debt to hold its quarterly cash balance near $10 billion. 

Analysts at Canaccord slashed the company's price target to $225 a share from $340.

While the firm says that the 18% drop in the stock on Wednesday was overblown, "it is clear that the outlook for Boeing has materially stepped down in the past few weeks."

Canaccord says Boeing isn't facing a liquidity crisis, but the firm estimates that cash pressure on Boeing has accelerated due to the coronavirus.

JPMorgan downgraded Boeing to neutral while cutting its price target to $210 a share from $370. 

"Our desire to hang in with Boeing until the return of the 737 MAX has worked out poorly, both regarding the timeline for recertification and now more importantly with the impact of Covid-19 on aircraft demand," Boeing said.

Boeing shares at last check fell 15% to $160.65.