S&P gives Lenovo BBB-

S&P said it assigned Lenovo Group Ltd. a BBB- issuer rating.

“The rating on Lenovo reflects the company’s strong position in the PC market, good supply chain management, geographic diversity in end-demand and manufacturing, and relatively low adjusted debt leverage,” S&P said in a press release.

Offsetting these strengths are its high concentration in the mature PC segment, low but improving profit margins due in part to losses at its mobile and server businesses, and small EBITDA base relative to peers such as HP Inc. and Dell Technologies Inc., the agency said.

“We forecast Lenovo’s adjusted net debt-to-EBITDA ratio will fall below 2x in the fiscal year ending March 31, 2021, on improving EBITDA and cash flow, helped by the recovery from the effects of Covid-19 and good cost control,” S&P said.

The outlook is stable.

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