Boeing (BA) could be in trouble. The firm risks a ratings downgrade as credit agencies assess the impact of the worker strike on cash flows.
Boeing would need to raise billions of dollars by selling stock. The transaction would benefit firms like Citigroup (C), Bank of America (BAC), JPMorgan (JPM), and Goldman Sachs. The aerospace giant has substantial business headwinds. Quality problems led to a door panel blowing off its 737 MAX jet in January.
Boeing has around $60 billion in debt. It would need to raise up to $15 billion to cover the negative cash flow of over $7 billion through June 30, 2024.
Watch Berkshire Hathaway (BRK-B) today. On Monday, the firm disclosed the sale of $10 billion in Bank of America stock. The firm cut its stake from 13.1% in 2011 to around 10.1%. The sale is problematic for the financial services sector. Despite increasing its dividend and strengthening its balance sheet, Berkshire may foresee a crisis ahead.
Bank of America will report results next week. Its competitor, Wells Fargo (WFC), will report results this Friday. When JPMorgan reports results, investors expect the firm to earn $4.01 in EPS and nearly $42 billion in revenue. This represents a -7% and +2% growth, respectively.