S&P Global Ratings on Monday revised its outlook on Revvity Inc. (NYSE:RVTY) to stable from negative and reaffirmed the company's BBB issuer credit rating. The ratings firm cited Revvity's ability to maintain trailing-12-month adjusted leverage at or below 3x in recent quarters, despite substantial share repurchases.
The agency anticipates continued deleveraging over the next two fiscal years. Specifically, S&P projects adjusted leverage to decline to 2.7x at the end of 2026 and further to 2.4x in 2027, underpinned by stronger revenue growth and improved profitability.
S&P's cash flow projections show annual free operating cash flow above $500 million in the coming years. Management plans reflected in the ratings analysis include allocating between $400 million and $500 million annually to share buybacks, while dedicating less than $100 million a year to acquisitions for each of the next two years.
On revenue, the ratings agency expects organic growth in the 3.5% to 4.5% range for both 2026 and 2027. That outlook rests in part on a gradual recovery in pharmaceutical and biotechnology spending. S&P also noted that Revvity's Reproductive Health segment and its newer software offerings should support additional top-line momentum.
Profitability is another focal point of the upgrade. S&P projects Revvity's profit margin to improve into the 30% to 31% range in 2026 and 2027. The agency attributes this margin expansion to cost-optimization measures and internal artificial intelligence initiatives. In addition, S&P expects the planned divestiture of Revvity's China-based Immunodiagnostics business to boost profit margin by an estimated 50 to 100 basis points in 2028.
The ratings commentary also referenced Revvity's public statement of intent to repay notes maturing on July 19, 2026. S&P emphasized that the company has no history of increasing debt to finance share repurchases, a factor that supports the stable outlook.
Impacted sectors - The assessments and forecasts in S&P's note touch on the U.S. diagnostics and life sciences sector, pharmaceutical and biotechnology spending trends, and broader credit metrics relevant to capital markets participants.