Boeing (NYSE:BA) has entered into an agreement with Spirit AeroSystems (NYSE:SPR) and will offer $425 million in advance payments to help the fuselage supplier to tide over inventory challenges and lower cashflows. As part of the agreement, Spirit will maintain a production rate to meet Boeing’s contractual demand.
Boeing will also receive specific financial information from Spirit on a weekly basis. This agreement is expected to assist Spirit in managing reduced deliveries to Boeing following limitations on the production of Boeing’s 737 MAX by the U.S. aviation regulator, the Federal Aviation Administration.
Spirit AeroSystems is a key supplier for Boeing, and the aerospace major has been in discussions with the company regarding its acquisition.
Families of Victims Urge U.S. DoJ to Prosecute Boeing
Meanwhile, families of the victims involved in two fatal Boeing 737 MAX crashes in 2018 and 2019 have urged the U.S. Department of Justice to prosecute Boeing for safety issues. These families allege that Boeing violated a deal with prosecutors to overhaul its compliance procedures, which it had entered into in 2021. At that time, federal prosecutors had agreed to dismiss a criminal charge against Boeing if it complied with the deal terms over three years.
The family members of the victims argue that an independent authority is needed to ensure that Boeing is in compliance with the agreement.
Is BA Stock a Good Buy?
Analysts remain cautiously optimistic about BA stock, with a Moderate Buy consensus rating based on 17 Buys, six Holds, and two Sells. Year-to-date, Boeing has declined by more than 30%, and the average BA price target of $230.56 implies an upside potential of 36.3% from current levels. However, BA’s outlook may change as it is scheduled to report its Q1 earnings later today.
