S&P Global Ratings upgraded ICU Medical Inc. to a BB rating from BB- on Thursday, citing improved credit metrics and solid operating results. The ratings firm noted that adjusted leverage declined to 3.1x by the second quarter of 2026 and that free operating cash flow generation outpaced expectations.
The upgrade reflects a multi-year pattern of lower leverage for the U.S.-based infusion therapy company. In 2025, ICU Medical applied about $200 million of proceeds from the sale of a 60% stake in its IV solutions business to retire term loan borrowings. The company then deployed an additional $50 million of free operating cash flow toward debt repayment in the second quarter of 2026, which reduced reported leverage to 2.28x as of June 30, 2026.
S&P projects adjusted leverage of roughly 3.2x in both 2026 and 2027, while anticipating a path of continued deleveraging toward the company's internal net leverage target of 2x. Once that target is reached, the ratings agency expects ICU Medical to return more capital to shareholders through share repurchases. S&P also forecasts mid-single-digit percentage revenue growth and gradual margin improvement through 2027.
Operationally, ICU Medical reported 6% organic revenue growth in the second quarter of 2026. S&P attributed that gain to competitive wins, faster installations of infusion systems and recent product introductions. However, the agency expects reported revenue to decline by about 2.5% for full-year 2026 as a result of the deconsolidation of the IV solutions business, followed by approximately 4.5% growth in 2027. S&P projects margins to improve to a 15.5%-16.0% range in 2026.
The ratings agency assigned a stable outlook to the rating, reflecting its expectation that ICU Medical will keep adjusted debt to EBITDA below 4x and achieve free operating cash flow to debt near 15% in 2026. S&Ps commentary also noted regulatory developments: the company closed a 2021 FDA warning letter in early 2026, while a separate warning letter issued in 2025 related to certain pump products remains unresolved.
Contextual note - The upgrade centers on the company's improved leverage profile and stronger-than-expected cash generation, alongside S&P's forecasts for modest revenue increases and margin expansion through 2027.