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Investing.com -- S&P Global (NYSE:SPGI) Ratings affirmed Boeing Co ’s (NYSE:BA) ’BBB-’ credit rating Monday and removed the aerospace giant from CreditWatch Negative, citing improved production levels and declining cash burn. However, the ratings agency maintained a negative outlook due to ongoing uncertainty around the pace of recovery in aircraft deliveries.

Boeing reported stabilized output of the 737 MAX, producing aircraft in the low 30s per month with plans to ramp up to 38 soon. The company is also seeking FAA approval to lift that rate to 42 by year-end, after resolving prior quality control issues and supply chain disruptions.

First-quarter deliveries included 105 737 MAX jets and 13 787 Dreamliners, reflecting a firming of operations after production headwinds. Airline demand has remained resilient, providing Boeing with tailwinds for increased manufacturing.

On the defense side, Boeing reported no new charges in Q1 and saw operating margins reach 2.5%. Continued progress on its MQ-25 and T-7A programs, as well as a recent win in the Air Force’s Next Generation Air Dominance program, support greater confidence in long-term defense profitability.

Boeing’s largely U.S.-based manufacturing footprint has mitigated the impact of tariff tensions and allowed continued progress on aircraft assembly. The company is working to reallocate around 50 aircraft originally built for Chinese customers, holdovers from frozen deliveries due to geopolitical strains.

The balance sheet remains fortified, with $23.7 billion in cash and cash equivalents at the end of Q1. Liquidity has been further supported by a $24.3 billion equity raise in October and a planned $10 billion divestiture of its aviation software division.

Debt remains a looming concern, with $1.3 billion maturing in 2025 and $8 billion in 2026. Additionally, the pending acquisition of Spirit AeroSystems (NYSE:SPR) could bring about $4 billion in consolidated debt onto Boeing’s books.

Despite improvements, S&P maintained a cautious view, citing the risk of persistent supply chain constraints, regulatory uncertainty, and execution setbacks. A downgrade could occur if Boeing fails to meet projected cash flow and leverage targets over the next two years.

The outlook could stabilize if Boeing demonstrates sustained growth in commercial aircraft production, achieves margin expansion in defense, and executes on debt reduction. Until then, investors are likely to remain watchful of the company’s execution and recovery progress.

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