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S&P Lifts Newmark Group to Investment Grade on Stronger Credit Profile
S&P Global Ratings on Wednesday upgraded commercial real estate services firm Newmark Group Inc. (NASDAQ:NMRK) to an investment-grade credit rating of 'BBB-' from 'BB+'. The move reflects the company's significantly improved credit metrics and robust earnings growth, driven by a recovery in commercial real estate.
Improved Financial Standing
The upgrade to investment grade was underpinned by Newmark's strengthened balance sheet. S&P highlighted that the company has built a substantial credit buffer over the past two years, with key metrics demonstrating improved financial discipline.
- Adjusted Leverage: Newmark's adjusted leverage was 1.2x for the twelve months ending June 30, 2026, down from 1.3x at the end of 2025.
- Growth: For the same twelve-month period, the company's adjusted revenues grew by over 20% and adjusted earnings increased by approximately 17%.
- Profitability: Adjusted EBITDA margins stood at roughly 27%, according to the ratings agency.
S&P now expects Newmark to maintain its adjusted leverage below 2.0x even in weaker market conditions, a notable improvement from its previous expectation of 2.0x to 3.0x.
Outlook and Projections
AdS&P assigned a stable outlook to the new rating, expressing confidence that Newmark's financial performance will offset potential spending on acquisitions or shareholder returns. The ratings agency also upgraded the issue-level rating on Newmark's senior unsecured notes to 'BBB-'.
Looking ahead, S&P projects Newmark's adjusted revenue will grow by 15%-18% in 2026 and 8%-10% in 2027. The agency forecasts adjusted EBITDA to reach between $900 million and $1 billion with margins of 26%-28%.
Agency Assessment
While upgrading the rating, S&P maintained a "fair" assessment of Newmark's business. The agency noted the company's relatively limited scale, with an adjusted revenue base of $3.0 billion to $3.5 billion, and its geographic concentration, with over 80% of its business derived from the U.S. S&P also assessed Newmark's liquidity as "adequate," pointing out that its nearest significant debt maturity is not until January 2029.
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