Aug. 20 at 11:56 PM
Moody’s Ratings affirmed Polaris Inc.’s Baa3 long-term issuer and senior unsecured debt ratings on Thursday, while revising the outlook from negative to stable. The stable outlook reflects expectations for continued sales recovery in 2026 and 2027, supported by lower dealer inventory levels achieved in recent years.
Moody’s expects Polaris’ leverage to decline to about 2.5x by the end of 2027, from 3.6x for the 12 months ended June 2026. The Baa3 rating is supported by the company’s strong position in the North American powersports market, particularly its leading presence in recreational and utility off-road vehicles, although demand remains sensitive to economic cycles because of the discretionary nature of the products.
Credit metrics are expected to improve through 2026-2027 as sales recover, with the rebound beginning in the third quarter of 2025. Moody’s forecasts EBIT margins improving to around 5%-6% in 2027, though still considered weak for the current rating.
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