S&P Global Upgrades Revvity Outlook to Stable, Citing Leverage Discipline

S&P Global Ratings has upgraded its outlook on life sciences firm Revvity Inc. (NYSE:RVTY) to stable from negative, affirming the company's BBB issuer credit rating. The revision, announced Monday, reflects Revvity's consistent financial policy, particularly its ability to maintain adjusted leverage at or below 3x despite significant share repurchases.

Rationale and Projections

The ratings agency projects a continued improvement in Revvity's credit metrics, forecasting that adjusted leverage will decline to 2.7x by the end of 2026 and further to 2.4x in 2027. This deleveraging is expected to be supported by revenue growth and enhanced profitability.

S&P's analysis anticipates robust cash generation and a disciplined approach to capital allocation. Key financial projections include:

• Annual free operating cash flow is expected to exceed $500 million in the coming years.
• Capital allocation is forecast at $400 million to $500 million for share buybacks annually.
• Acquisitions are expected to be modest, at less than $100 million per year for the next two years.

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Growth and Margin Expansion

S&P Global anticipates Revvity will achieve organic revenue growth of 3.5% to 4.5% in 2026 and 2027. This growth is expected to be driven by a gradual recovery in pharmaceutical and biotechnology sector spending, along with tailwinds from the company's Reproductive Health segment and newer software offerings.

Profitability is also set to improve, with S&P forecasting Revvity’s profit margin to expand into the 30% to 31% range over the next two years. The improvement is attributed to cost-optimization programs and internal artificial intelligence initiatives. The ratings agency noted that the planned divestiture of Revvity's China-based Immunodiagnostics business should provide an additional 50 to 100 basis points of margin improvement in 2028.