Fitch confirms Lenovo's BBB credit rating, with a stable outlook

LootboxPhobia · 2026-02-27T20:37:14+00:00

Fitch Ratings has affirmed Lenovo Group's long-term credit rating at BBB with a stable outlook, reflecting its solid credit position. Although the PC market may contract, Lenovo expects to maintain revenue growth through high-end products and price increases. The EBITDA leverage ratio is projected to be between 1.0 and 1.3 times over the next three years, with ample liquidity to support funding needs.

LootboxPhobia

2026-02-27 20:37:14

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Investing.com — Fitch Ratings on Friday confirmed Lenovo Group Limited’s long-term foreign currency and local currency issuer default ratings at BBB. Outlook stable. The rating agency also affirmed the company’s senior unsecured rating at BBB, as well as its $625 million 5.831% notes due 2028, $1 billion 3.421% notes due 2030, and $625 million 6.536% notes due 2032 at BBB.

This confirmation reflects Fitch’s expectation that Lenovo will maintain a solid credit profile, supported by its leading position in the global PC market, service-oriented transformation, and moderate financial leverage. The Chinese company maintained its top position in PC shipments in Q4 2025, with market share increasing from 24% to 25% compared to the same period last year.

In the nine months ending March 2026, Lenovo’s Intelligent Devices Group revenue grew 15% year-over-year, while Solutions and Services Group revenue increased 18%. Despite increased losses in the Infrastructure Solutions Group, Fitch-defined EBITDA grew 27% year-over-year to $3.7 billion during this period.

As memory prices rise and suppress demand, PC shipments may contract in 2026. Fitch forecasts memory prices will increase at least in the high double digits in 2026. Lenovo expects its PC shipments to decline in the mid-single digits. The company aims to moderately increase PC revenue through a higher proportion of high-end products and price increases.

Fitch expects EBITDA for fiscal year 2027 to decline 5% year-over-year, then slightly recover in fiscal year 2028. The rating agency forecasts that revenue for the Solutions and Services Group will grow at an average double-digit percentage annually from 2026 to 2029, mainly driven by managed services and project and solutions businesses, which together accounted for about 60% of the segment’s revenue in Q3 2026.

After restructuring and cost-cutting in Q3, the Infrastructure Solutions Group may break even in Q4 2026. Fitch expects the segment’s profitability to gradually improve, reaching low single-digit profit margins by fiscal year 2029.

Compared to peers like Dell Technologies (NYSE: DELL) and HP (NYSE: HPQ), Lenovo remains more reliant on its PC business for profit and cash generation. Dell and HP derive approximately 69% and 60% of their segment profits from non-PC businesses, respectively, while Lenovo’s figure is about 35%.

Fitch expects Lenovo’s total leverage ratio to remain between 1.0x and 1.3x EBITDA over the next three years. The agency believes ample liquidity and free cash flow before dividends will be sufficient to support dividend payments, acquisitions, and investment spending.

These ratings are based on Lenovo’s standalone credit profile. Lenovo Holdings owns 32% of the shares and has two board seats, but Lenovo operates independently, and Lenovo Holdings’ voting rights are not excessive.

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