The Price for Boeing (NYSE:BA) to Avoid Prosecution: $1.1 Billion

Aerospace stock Boeing’s (BA) comeback trail has been a long thing, and marked by a lot of events. Spending cuts were also on the docket, amid layoffs and pullbacks, and attempted sales of divisions. Now, Boeing is about to pay out big in two directions, as it agreed to a government deal to pay $1.1 billion to avoid prosecution. The second, a planned expansion in St. Louis. Boeing shareholders were less than pleased, and sent shares down fractionally in Thursday afternoon’s trading.

Boeing agreed to pay the $1.1 billion required to avoid prosecution, which will include cash paid out to the families of the victims of two 737 Max jet crashes. But part of that $1.1 billion will also go to “improvements to compliance and safety programs,” reports noted. Boeing was also required to admit to “…conspiracy to obstruct the FAA’s operations of its Aircraft Evaluation group.”

The payout is split nearly down the middle, reports noted, with $455 million going toward the improvements noted previously, and $444.5 million going to the victims’ families directly. Boeing was also required to pay an additional “criminal monetary penalty” of $487.2 million, but half of that has already been paid, paid back in 2021, reports noted. Finally, Boeing is also expected to continue “antifraud compliance and ethics” operations, complete with an “independent compliance consultant” who will report back to the government.

The Next Huge Bill

That was just for starters, as Boeing’s checkbook got a serious workout. The next part came when Jacobs (J) announced that it would be offering “…design, engineering and environmental services” for the upcoming Boeing expansion in St. Louis, Missouri. No one knows just how much the check was written for outside of Boeing, as it did not disclose terms.

But it will be substantial, as Boeing is putting in a 1.1 million square foot expansion, or roughly, 25 acres. That expansion will roughly double Boeing’s manufacturing operations in the area, and will also offer “…advanced assembly facilities and the associated post assembly operations center for future generations of advanced aircraft.”

Is Boeing a Good Stock to Buy Right Now?

Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 16 Buys, three Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 10.74% rally in its share price over the past year, the average BA price target of $218.37 per share implies 3.64% upside potential.

See more BA analyst ratings

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