BA - The Boeing Company

NYSE - NYSE Delayed price. Currency in USD
151.39
+5.54 (+3.80%)
At close: 4:00PM EDT

153.14 +1.75 (1.16%)
Pre-market: 8:26AM EDT

Stock chart is not supported by your current browser
Previous close145.85
Open145.45
Bid153.45 x 800
Ask154.20 x 800
Day's range144.55 - 153.55
52-week range89.00 - 391.00
Volume27,014,609
Avg. volume34,521,398
Market cap85.433B
Beta (5Y monthly)1.45
PE ratio (TTM)N/A
EPS (TTM)-6.03
Earnings date22 Jul 2020 - 27 Jul 2020
Forward dividend & yieldN/A (N/A)
Ex-dividend date13 Feb 2020
1y target est154.32
  • Don't resist order deferrals, Qatar Airways tells jetmakers
    Reuters

    Don't resist order deferrals, Qatar Airways tells jetmakers

    Qatar Airways Chief Executive Akbar al-Baker on Tuesday warned Airbus and Boeing against resisting the airline's requests to defer aircraft deliveries, in a battle over who should bear the strain of the coronavirus crisis. The state airline, whose CEO has more usually been known for criticising delays at planemakers, is now in talks like many rivals to push back deliveries due to the impact of the crisis. "We are negotiating with both Boeing and Airbus to fulfil our requirement to defer and we hope that both the manufacturers will oblige," he told Reuters by phone.

  • Embraer seeks business partners but not a repeat of the Boeing deal
    Reuters

    Embraer seeks business partners but not a repeat of the Boeing deal

    The world's No. 3 planemaker Embraer <EMBR3.SA> is open to new business partners after Boeing Co <BA.N> ditched a $4.2 billion deal that was years in the making, the Brazilian company's chief executive told Reuters. "We are not looking for a partnership of the size that the company had with Boeing," he said. "We think that it would be faster and more efficient to have partnerships by project."

  • Why Boeing, Spirit AeroSystems, and Harley-Davidson Stocks All Popped Today
    Motley Fool

    Why Boeing, Spirit AeroSystems, and Harley-Davidson Stocks All Popped Today

    It's the first Monday in June, trading is back in full swing after a holiday-shortened week, and stock markets are glowing a modest shade of green, with the S&P 500 up a healthy 0.5% in midday trading. Industrial stocks, in particular, are getting a nice boost, with shares of Boeing (NYSE: BA) up 3.5%, Boeing airplane parts supplier Spirit AeroSystems (NYSE: SPR) doing even better -- up 9.7% -- and Harley-Davidson (NYSE: HOG) riding 7% higher as of 2:15 p.m. EDT.

  • Will protests and looting permanently damage the economy?
    Yahoo Finance

    Will protests and looting permanently damage the economy?

    Here's how investors should be thinking through the impact of social unrest sweeping the country.

  • 4 Tech Stocks to Soar on SpaceX Ship's Historic Voyage
    Zacks

    4 Tech Stocks to Soar on SpaceX Ship's Historic Voyage

    The success of SpaceX and launch of new constellations of satellites to enter low-Earth orbit in the coming years brighten prospects for space technology.

  • Motley Fool

    Low-Price Retailers Post High Growth

    In this episode of MarketFoolery, Chris Hill chats with Fool.com contributor Dan Kline about the latest news from the markets. They look at the retail space and how retail businesses are serving underserved communities.

  • Embraer says China, India are potential partners after failed Boeing deal
    Reuters

    Embraer says China, India are potential partners after failed Boeing deal

    Brazil's Embraer SA said on Monday that China and India could be potential new partners, following a Reuters report last week that said those two countries as well as Russia were interested in the planemaker's commercial jets division. Embraer is dealing with the abrupt collapse of a planned deal with Boeing Co in April that left the company scrambling for a plan B. Embraer Chief Executive Francisco Gomes Neto said in an earnings call that it was still early to discuss new opportunities in detail as the company is studying a new five-year plan.

  • We All Might Be Flying in Planes Again Soon
    Bloomberg

    We All Might Be Flying in Planes Again Soon

    (Bloomberg Opinion) -- Covid-19 became a pandemic because airplane passengers carried the new coronavirus with them around the world. As that became clear, airlines grounded nearly all of their fleets, governments issued travel restrictions and mandatory quarantines, and tourist attractions and conferences closed down. With no reason to fly, a quick recovery for air travel seemed unlikely. Warren Buffett dumped his airline stocks, claiming that the “world has changed.”Passengers also wouldn’t feel safe packed inside a metal tube for hours, would they?Happily for the industry, if not for the climate, the seemingly insurmountable barriers to air travel have begun to look less daunting. “We believe the worst is behind us, and we’re on the uptick,” American Airlines Group Inc.’s boss, Doug Parker, said after a surge in travel over the U.S. Memorial Day holiday weekend.Investors have taken notice. The Bloomberg Americas Airlines stocks index has rebounded by almost one-third from the mid-May low, and European carriers have made similar gains. Shares in German tour operator Tui AG have risen too.Such optimism feels jarring when airlines, American Airlines included, are poised to cut thousands of jobs. Most are still burning huge amounts of cash. Deutsche Lufthansa AG needs a 9 billion-euro ($10 billion) bailout, and Latam Airlines Group SA joined Latin American peer Avianca Holdings SA in filing for bankruptcy last week.But Parker is probably right to expect a continued recovery, at least on domestic and short-haul routes. This won’t be enough to put debt-laden airlines on a secure footing, and a full demand recovery probably won’t happen for a couple more years. But, right now, a desperate industry will take any good news it can get. The rigorous hygiene measures airlines have announced should go a long way toward restoring passenger confidence.  European budget carrier Ryanair Holdings Plc expects to operate at 40% of normal capacity from July, and the way bookings are shaping up suggests those planes will probably be at least half full. EasyJet Plc sees “encouraging” trends and notes that winter bookings are higher than usual for this time of year, although part of that may be because people have refund vouchers to use and are rebooking cancelled trips.  Ryanair’s extensive summer flight schedule had seemed premature a couple of weeks ago, but the travel restrictions that kept Europeans from moving around the continent are being relaxed. Starting in July, Spain is set to drop its requirement for international arrivals to quarantine for 14 days. Britain imposed a similar rule but is under immense pressure to abandon it. Travel between Europe and the U.S. will take longer to open up, but even on this there are encouraging signs of political will to get people flying again.   A month ago, United Airlines Holdings Inc.’s chief executive officer, Scott Kirby, lamented that there wouldn’t be a recovery in flying until attractions like Disney World and the Paris museums were open again.Well, they will be soon. It’s already possible to visit the Acropolis in Athens and St Peter’s Basilica in Rome. Paris’s parks and museums are set to reopen from June. The French capital is usually swamped with tourists at this time of year, so there’s an incentive for travelers to get there first. Walt Disney World expects to reopen its Florida park from July, albeit with compulsory face masks and a ban on hugging your favorite Disney character.I’ve written before about how things like wearing masks and having to ask permission to use the toilet will make flying even less enjoyable. But these measures may make passengers feel safer. For example, while the gowns and other personal protective equipment issued to Emirates’ cabin crew are a little intimidating, they’re likely to put some nervous flyers at ease.As with SARS almost two decades ago, there are understandable concerns about catching coronavirus within the aircraft cabin, most likely from someone seated close by. The evidence isn’t comprehensive or conclusive, but so far there are surprisingly few documented cases of this happening with Covid-19. Airline industry body IATA says it knows of only one case where a person transmitted the virus to more than one person on board. Not surprisingly, plane manufacturers Airbus SE and Boeing Co. are studying the subject intensively. There are other plausible reasons why flying might be safer than you’d think: The air is filtered and frequently replenished from outside, seats act as somewhat of a barrier and passengers don’t move around the cabin much. Singing, yelling and talking loudly — contributors to so-called super-spreader infection events — are a big faux pas when you fly. Many passengers would still prefer the middle seat to be empty, but as I’ve written before, unless ticket prices rise, that would severely hamper airlines’ ability to break even.Of course, the longer someone’s on board, the greater the chance they’re exposed to infection. Hence people may feel comfortable flying domestic and short-haul before they’re willing to fly halfway around the globe.Companies will probably take longer to get comfortable with the risk (and potential liability) of their employees flying for business. About half the corporate clients American Airlines surveyed still have a travel ban, although that’s down from two-thirds at the peak of the crisis. Millions of potential passengers have also lost their jobs and won’t feel able to splash out on holidays.And then there are the psychological scars from the prolonged lockdown. Being outside now feels a lot safer than being in any kind of confined space. A staycation in a local Airbnb might feel preferable to getting on a plane.For those willing to take the risk, and who can find adequate travel insurance, a rare opportunity awaits. Want to see Venice without the crowds? Now’s your chance.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SpaceX Astronauts Reach Space Station After Milestone Voyage
    Bloomberg

    SpaceX Astronauts Reach Space Station After Milestone Voyage

    (Bloomberg) -- Two American astronauts boarded the International Space Station from a SpaceX capsule, marking the first time humans have traveled to orbit on a commercially developed craft, forging a new era for NASA and visionary billionaire Elon Musk.The Dragon craft carrying NASA astronauts Bob Behnken and Doug Hurley arrived at the orbiting lab at 10:16 a.m. Eastern time Sunday, about 19 hours after lifting off from the Kennedy Space Center in Cape Canaveral, Florida. They entered the station at 1:22 p.m. after completing a series of arrival checklists.“We have to congratulate the men and women of SpaceX,” Hurley said after the docking. “Their incredible efforts over the last several years to make this possible cannot go overstated.”The milestone flight is the first time American astronauts have flown from U.S. soil since the space shuttle program ended in 2011. The achievement comes 18 years after Musk founded Space Exploration Technologies Corp. with the ultimate goal of populating other planets. Hurley called it “an incredible time to be at NASA,” with three manned-vehicle programs in the works and progress toward a return to the moon.“Welcome to Bob and Doug,” NASA Administrator Jim Bridenstine told the astronauts from Mission Control in Houston shortly after the two men entered the station. “The whole world saw this mission and we are so, so proud of everything you have done for our country and to inspire the world,” he said.QuickTake: Why U.S. Astronauts Hitched Historic Ride With SpaceXThe highest-profile U.S. rocket launch in decades captured interest around the globe, watched live on Saturday by approximately 10 million people. The flight comes at a time when people are clamoring for good news amid the Covid-19 pandemic, surging unemployment and growing U.S. protests against police violence.“This is just one effort that we can show for the ages in this dark time that we’ve had over the past several months to kind of inspire, especially the young people in the United States, to reach for these lofty goals and work hard and look at what you can accomplish,” Hurley said from the space station.‘So Proud’President Donald Trump and Vice President Mike Pence were among those who gathered with Musk to watch the spectacle. Trump spoke with the two astronauts prior to the launch and, in a brief exchange with reporters, referred to Musk as one of the “great brains,” according to a pool report.The rooftop shook as the rocket rumbled to orbit, according to the report. Within seconds, Elton John’s “Rocket Man” -- a Trump rally classic -- began to play over speakers, the report said.“They have a long way to go but that’s a very dangerous part of it there,” Trump said. “I’m so proud of the people, of NASA, public and private. When you see a sight like that, it’s incredible. When you hear that sound — the roar — you can imagine how dangerous it is.”The launch and the initial phases of the journey proceeded smoothly. The main rocket booster flew back to Earth and stuck the landing on a drone ship -- a once-remarkable feat that has become routine for SpaceX.The two astronauts joined the Expedition 63 crew members already in residence on the space station. Their voyage, known as Demo-2, is the final major test of SpaceX’s human spaceflight system before the National Aeronautics and Space Administration certifies it to fly working missions to the space station.Boeing Co. is also preparing to carry people to the orbiting lab as part of the same Commercial Crew program at NASA.Weather ClearsThe SpaceX launch was originally slated for May 27, but was scrubbed due to bad weather. While rain showers earlier Saturday briefly raked launch complex 39A, the weather cleared and SpaceX loaded fuel onto the Falcon 9 rocket and moved through a final check of its systems.Gwynne Shotwell, the company’s president and chief operating officer, said she was “super-nervous, stomach-in-throat,” in a television interview from SpaceX headquarters minutes before lift-off. Shotwell and her team monitored the mission from the company’s control center in Hawthorne, California, wearing masks and sitting at carefully spaced terminals.Successfully carrying humans to space would mark the latest breakthrough for a company known for setting audacious goals. In the decade since the first Falcon 9 rocket reached orbit, SpaceX has eclipsed rivals like Europe’s Arianespace and United Launch Alliance, a Boeing-Lockheed Martin Corp. venture, to grab the lead of commercial launches.“Launching satellites is nice and we got to bring in more money than we spend, this is important, but ultimately this is life beyond earth,” Musk said at a briefing after the launch, where he recalled how he developed SpaceX with funds he got from PayPal. “Hopefully this is the first step on that journey” for “life becoming multi-planetary for the first time.”Musk’s space company is valued at about $36 billion, and its bravado and reusable rockets have inspired other entrepreneurs. The competition could get fierce this decade as Blue Origin, founded and funded by billionaire Jeff Bezos, Northrop Grumman Corp., ULA and Sierra Nevada Corp. all bring new spacecraft to market.‘Numerous Providers’At least that’s the dream for Bridenstine, the NASA administrator. The U.S. space agency is seeking to change the notion that government must create both demand and supply for spaceflight. He said at a post-launch briefing that NASA is seeking a business model where it’s not the only customer.“We want to have numerous providers competing on cost, innovation and safety,” he said in an interview on Bloomberg TV on May 27.Commercial spaceflight has taken a long time to evolve since 2001, when engineer and entrepreneur Dennis Tito, founder and CEO of Wilshire Associates, became the first private individual to buy a seat to space aboard a Russian Soyuz rocket.Now, with the financial disruption from Covid-19 injecting fresh uncertainty into the industry’s immediate future, Bridenstine vowed to push ahead. He said he hoped the moment would be a bright spot amid the nation’s many challenges.“I was praying for Bob and Doug, I was praying for their families, I was praying for their safe return,” he said. “If this can inspire a young child to become the next Elon Musk or Jeff Bezos or Sir Richard Branson, then this is what this is all about.”(Updates with entry to space station and comments in first six paragraphs)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • First Manned Flight Is Just One Step for SpaceX
    Bloomberg

    First Manned Flight Is Just One Step for SpaceX

    (Bloomberg Opinion) -- The SpaceX Crew Dragon capsule that’s orbiting the Earth with two U.S. astronauts is the picture of New Space Age glamour. It’s a sleek, stylish commercially made capsule that’s destined to be featured beside Italian sports cars in future design textbooks. Just don’t tell that to Elon Musk, SpaceX’s chief executive and chief designer. “Is a Ferrari more reliable than a Toyota Corolla or a Honda Civic?” he once asked a space journalist. The answer, of course, is that the simpler sedans are far more reliable than the well-crafted sports car. So SpaceX, Musk made clear, was going to make Corollas.It’s a practically minded outlook for a company founded on the galactically large ambition to transform humanity into a multiplanetary species. But Musk and SpaceX implicitly understand something that national space programs haven’t really accepted: Success in space exploration isn’t, ultimately, about achieving “firsts” like the moon landing. Rather, it’s repeat business that will establish moon colonies and Musk’s Martian city. To get that business, SpaceX has to show that national space programs, with their expensive, Ferrari-like rockets, capsules and contractors, won’t get there. On Saturday, it succeeded.The 20th century space race wasn’t about the money, it was about the record books. The respective financial strengths of the U.S. and Soviet systems certainly played a role, but when national pride is at stake, performance matters more than costs. For decades, NASA, in particular, internalized that priority by adopting cost-plus contracts with its contractors. Under these arrangements, NASA agrees to pay the value of a project’s development costs, plus an associated fee (often about 10%). It’s an excellent system for encouraging contractors to invest in difficult, long-term projects with hazy costs.But if the goal is to create something that works repeatedly, and on-budget, cost-plus is a problem. After all, if a contractor’s fees increase during project delays, then that contractor lacks an incentive to control costs and finish on deadline. Making matters more difficult, expensive government programs must meet political requirements that no profit-seeking business would ever consider. The development of the 1970s-era space shuttle was spread out over states and produced an outrageously expensive “reusable” rocket that took thousands of hours to prepare for reuse. In 2012, Musk correctly called the shuttle “a Ferrari to the nth power.”By that point, Musk, too, was working with the U.S. government. But unlike traditional NASA contractors such as the Boeing Co, he was doing it on a fixed-fee basis. So, rather than get paid along the way, SpaceX accepted a fixed fee to build a technology, and whatever wasn’t used in development could be kept as profit.That doesn’t mean cutting corners. NASA requires that SpaceX’s technology meet its high safety standards (often to Musk’s chagrin). But it does mean that SpaceX has a strong incentive to find ways to control costs while building cutting-edge technology. For example, rather than try to perfect a single rocket for a flawless first launch, SpaceX opted for iterative design, whereby it launched — and failed — early prototypes repeatedly, as a means to learn from its mistakes and speed up rocket design. It’s an approach that differs substantially from traditional aerospace companies, which spend years and money perfecting a design before flying it (the Ferrari approach). Likewise, SpaceX, freed from political constraints, concentrated its design and testing in single locations, rather than spread it out geographically. It’s what any rational for-profit manufacturer would do.This approach has been fruitful. The rocket that carried the Crew Dragon capsule into orbit is a Falcon 9, from a family of rockets developed for $390 million with assistance from NASA under fixed-price contracts. According to a 2011 NASA report, the cost would’ve been $1.7 billion to $4 billion if the same rocket had been developed using traditional means. More dramatically, the development of the Falcon 9 has reduced the cost of a space launch by a factor of 20, at least. A kilogram launched on the space shuttle, which last flew in 2011, cost about $54,500. A kilogram on the Falcon 9 runs about $2,700.Of course, launching humans into space is more difficult and expensive than launching cargo. Even so, SpaceX managed to lap more traditional contractors. In 2011, NASA announced plans to build the Space Launch System, a massive new rocket to send Americans back to the moon. To save on costs and time, the rocket was to be built using engines and other components from the space shuttle program. Ominously, it was also to be built by the Boeing Co under a cost-plus contract. In 2014, NASA committed to a November 2018 launch date at a cost of $9.7 billion. Then the launch dates started slipping, all to the benefit of Boeing. By March, the launch date had moved to the second half of 2021, with costs escalating to $18.3 billion. If and when it flies, each rocket will exceed $1 billion — more than three times what it cost to develop the Falcon 9.For now, SpaceX’s approach is the clear winner, but its challenges are far from over. Above all, the company must demonstrate that its relatively inexpensive human-capable flights have a commercial market — an idea that’s far from certain. Similarly, the company will need to prove the business case for its longer-term, and substantially more expensive, ambitious exploration program. But today, at least, the Musk’s Corolla is beating the Ferrari by millions of miles.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Adam Minter is a Bloomberg Opinion columnist. He is the author of “Junkyard Planet: Travels in the Billion-Dollar Trash Trade” and "Secondhand: Travels in the New Global Garage Sale."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Musk's SpaceX set to retry historic rocket launch
    Yahoo Finance UK

    Musk's SpaceX set to retry historic rocket launch

    The mission is a milestone in Musk’s drive to make space travel less expensive, marking the first time a commercially developed spaceship will have carried Americans into orbit.

  • Forget Boeing: This Aerospace Company Proved Its Stock Is a Better Buy Now
    Motley Fool

    Forget Boeing: This Aerospace Company Proved Its Stock Is a Better Buy Now

    Heico is a diversified, low-debt option for investors interested in buying into an aerospace recovery.

  • Why Shares of Embraer Are Up Today
    Motley Fool

    Why Shares of Embraer Are Up Today

    What happened Shares of Embraer (NYSE: ERJ) spiked 17% on Friday following a report that a Chinese manufacturer has expressed interest in joining forces with the world's third-largest commercial airplane manufacturer.

  • Boeing (BA) Up 6.2% Since Last Earnings Report: Can It Continue?
    Zacks

    Boeing (BA) Up 6.2% Since Last Earnings Report: Can It Continue?

    Boeing (BA) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

  • Exclusive: Brazil's Embraer draws foreign interest after Boeing rift - sources
    Reuters

    Exclusive: Brazil's Embraer draws foreign interest after Boeing rift - sources

    Aircraft makers are circling Brazil's Embraer weeks after Boeing ditched plans for a historic commercial aviation tie-up, people familiar with the matter said. Boeing axed plans to buy 80% of Embraer's commercial unit in April, ending a planned move into regional jets that mirrored rival Airbus' purchase in 2018 of a competing model developed by Canada's Bombardier. China's state-owned COMAC planemaker has voiced informal interest in co-operation with the world's third-largest jetmaker, two of the people said.

  • General Electric Expects Negative Free Cash Flow in 2020
    Motley Fool

    General Electric Expects Negative Free Cash Flow in 2020

    General Electric (NYSE: GE) forecasted negative free cash flow for the full year this week. The new CEO, Larry Culp, took over the company's sprawling asset portfolio 18 months ago, and still has work to do. Proceeds from that sale raised the company's liquidity position by over 20% during Culp's first year on the job, which should help offset this year's negative free cash flow.

  • Bloomberg

    Europe May Have to Hit U.S. With Tariffs to Settle Aircraft Dispute

    (Bloomberg) -- The European Union may have no option but to impose retaliatory tariffs against the U.S. over its illegal aid to Boeing Co. in order to settle the longstanding transatlantic dispute over aircraft subsidies, according to a senior EU official. Sabine Weyand, the EU’s top civil servant for trade policy, signaled the U.S. government feels it has leverage over the bloc after hitting $7.5 billion of European goods with duties last October in retaliation over unlawful support for Airbus SE.Washington won the green light for the penalties from the World Trade Organization, which in a tit-for-tat case is due to determine as soon as next month the damages the EU can seek over market-distorting state help for Boeing. While awaiting that verdict, the EU says it has proposed a settlement that Washington is shunning.The U.S. “is very comfortable in the current situation because they got their award before we got ours,” Weyand said on Thursday in Brussels during an online panel debate about international trade. “I’m afraid that we will have to wait for our award -- and for the imposition of sanctions by the EU on the U.S. side -- in order to re-balance the level playing field in terms of the negotiation.”The coronavirus-induced worldwide economic slump this year has raised the prospect of the EU and U.S. de-escalating their aircraft-aid battle, not least because aviation has been one of the hardest-hit industries.Weyand offered little sign on Thursday that such a scenario will play out before the WTO decision on damages the EU can claim in the Boeing case. The bloc has drawn up a plan for countermeasures worth $12 billion.“We will probably have a few more difficult months ahead of us before we manage to get everyone to the negotiating table,” she said. “It is more urgent in the context of the need for economic recovery.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • $1 Trillion of Corporate Bonds Today, Downgrades Tomorrow
    Bloomberg

    $1 Trillion of Corporate Bonds Today, Downgrades Tomorrow

    (Bloomberg Opinion) -- The amount of new debt issued this year in the U.S. investment-grade corporate bond market will reach $1 trillion today, by far the fastest pace in history. The implications of that milestone depend on how you look at it.For businesses that had been ravaged by the coronavirus pandemic and the ensuing nationwide lockdowns, access to capital markets was a lifeline to get through the worst of the economic collapse. Sure, Carnival Corp. had to offer interest rates like a junk-rated borrower and Boeing Co. needed to include a so-called coupon step-up provision to offset jitters that it could lose its investment grades. But, in the words of Federal Reserve Chair Jerome Powell, these deals avoided turning “liquidity problems into solvency problems” for brand-name American companies.It’s worth remembering that until the Fed stepped in with extraordinary support for credit markets, averting widespread failures was far from guaranteed. Investors pulled a staggering $35.6 billion and $38 billion from investment-grade funds in the weeks ended March 18 and March 25, respectively. Before 2020, the previous record was $5.1 billion of outflows. I wrote on March 19 that bond markets were veering into a vicious cycle that could get ugly in a hurry — four days later, the Fed announced what would end up becoming a $750 billion backstop for corporate America.Now, the Fed hasn’t actually had to buy any individual bonds yet, a fact that Powell seems proud to share. “We may have to be lending money to those companies, but even better, they can borrow themselves now, and a lot of that has been happening and that’s a really good thing,” he said during May 19 testimony before the Senate Banking Committee.Most people would probably agree with that assessment, at least for the immediate future as the country grapples with restarting the world’s largest economy. But what about the longer-term view?Here, the rampant borrowing paints a more sobering picture. As of late April, 1,287 issuers worldwide rated between AAA and B- by S&P Global Ratings were considered at risk of a potential downgrade, up from 860 in March and 649 in February. That surpasses the previous all-time high set in 2009. “Generally, we expect heavy credit erosion in coming months as issuers, especially those in the lower-rated spectrum come under heavy fire from poor earnings, continued difficulties in managing cost structures, and market volatility creating limited funding opportunities,” said Sudeep Kesh, head of S&P’s credit markets research.That’s bad enough, but doesn’t even strike at the heart of the issue. Last year was supposed to be the beginning of a broad “debt diet” among companies that borrowed huge sums to finance mergers and acquisitions during the longest expansion in U.S. history. That didn’t end up taking place on a wide scale. Even a success story like AT&T Inc., which made headway in trimming its debt stack, still found itself back in the bond market recently, borrowing $12.5 billion on May 21 in what was the biggest deal since Boeing’s $25 billion blockbuster offering.When it comes to companies directly impacted by the coronavirus pandemic or structural changes to their industries, the “big three” of S&P, Moody’s Investors Service and Fitch Ratings haven’t shied away from taking action. Ford Motor Co., Kraft Heinz Co., Macy’s Inc. and Occidental Petroleum Corp. are just a few of the “fallen angels” that lost their investment grades earlier this year.The rating companies haven’t been quite as keen to react to high leverage metrics. I frequently refer back to this feature from Bloomberg News’s Molly Smith and Christopher Cannon, which found that of the 50 biggest corporate acquisitions in the five years through October 2018, more than half of the acquiring companies increased their leverage to a level that would seemingly merit a junk rating but remained investment grade on the assumption that they’d take that leverage down in the coming years. Those expectations seemed ambitious in 2018, when the economy was seemingly invincible. Now, no one can truly expect companies to focus on right-sizing their debt. Corporate leaders are rightfully eager to raise cash to get to the other side of the pandemic, especially with all-in yields not far off from record lows. The vast majority of the $1 trillion in borrowing so far this year was by no means imprudent.In the years ahead, however, the overhang from this issuance spree will inevitably weigh down credit ratings. A company with more debt presents a greater risk of missed interest payments than if it had fewer fixed obligations. Fortunately, for much of the previous expansion, firms had no issue finding investors willing to buy their long-term securities. That practice of rolling over debt and extending maturities might very well be the norm in the months and years ahead, too. Still, if the first five months of 2020 are any indication, investment-grade bondholders will have to get comfortable with even more bloated balance sheets and the prospect of further credit downgrades. For better or worse, with the confidence that the Fed has their back, that seems like a risk investors are willing to take.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • The Zacks Analyst Blog Highlights: JPMorgan, American Express, Boeing and Virgin Galactic
    Zacks

    The Zacks Analyst Blog Highlights: JPMorgan, American Express, Boeing and Virgin Galactic

    The Zacks Analyst Blog Highlights: JPMorgan, American Express, Boeing and Virgin Galactic

  • Boeing Up on Layoff Decision, Resumption of 737 Production
    Zacks

    Boeing Up on Layoff Decision, Resumption of 737 Production

    Boeing's (BA) decision to terminate 12,000 of its U.S. employees is partially influenced by the COVID-19 pandemic

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