Fitch fixes Flex view to stable

Fitch Ratings said it revised the outlook for Flex Ltd. to stable from negative.

In October 2018, Fitch revised Flex's rating outlook to negative from stable following the company's announcement it had left its strategic partnership with Nike and the departure of its CEO. At the time, Fitch said it believed a positive rating action was not likely over the rating horizon.

However, Fitch said the rating could be stabilized if the company sustained total debt with equity credit to operating EBITDA below 3x before fiscal 2021, reflecting improved operational performance, material positive free cash flow sustained over the rating horizon and Flex's financial policy on shareholder return, weakened until its operational profile stabilized.

“Flex's new CEO under a revamped board achieved this outcome, bringing gross leverage to 3x in the LTM period ending Dec. 31, 2019. Additionally, the company achieved positive FCF,” said Fitch in a press release. The agency also affirmed Flex’s BBB- rating.

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