Moody’s upgrades Danaher ratings to A2, outlook stable

Investing.com -- Moody’s Ratings has upgraded Danaher Corporation’s ratings, citing the company’s solid operating performance despite macroeconomic challenges.

The credit rating agency raised Danaher’s senior unsecured and backed senior unsecured long-term ratings to A2 from A3, while upgrading the senior unsecured commercial paper ratings to Prime-1 from Prime-2. Moody’s also changed the outlook to stable from positive.

According to Moody’s, the upgrade reflects Danaher’s continued solid operating results despite macroeconomic uncertainties and research funding constraints affecting its customers. The rating agency also expects higher growth in 2026 compared to 2025 as these challenges diminish.

While acknowledging potential event risk related to debt-financed acquisitions, Moody’s believes Danaher’s strong cash flow would enable rapid deleveraging after any large transaction.

The A2 rating is supported by Danaher’s strong position in life sciences, including a diversified revenue base, leading market positions, and high recurring revenue. Solid operating margins and strong free cash flow provide flexibility for acquisitions and good deleveraging capability.

Moody’s expects Danaher’s gross debt/EBITDA ratio to remain below 3x absent very large acquisitions, despite the company not maintaining a specified leverage target.

The stable outlook reflects Moody’s expectation for accelerating revenue growth and deleveraging following any large acquisitions.

Governance factors played a key role in the rating action, with Moody’s noting favorable financial strategy and risk management considerations reflecting Danaher’s history of modest financial leverage. The agency also highlighted management credibility and track record as positive factors.

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