Fitch Ratings on Friday affirmed Lenovo Group Limited’s Long-Term Foreign- and Local-Currency Issuer Default Ratings at BBB and assigned a stable outlook. The agency also reaffirmed the company’s senior unsecured rating at BBB and maintained the BBB rating on three of Lenovo’s outstanding note issues: the $625 million 5.831% notes due 2028, the $1 billion 3.421% notes due 2030 and the $625 million 6.536% notes due 2032.
According to Fitch, the rating action reflects expectations that Lenovo will preserve a solid credit profile supported by its global position in the personal computer market, continued progress in shifting toward a service-led business model and a relatively modest financial leverage position.
Fitch noted that Lenovo retained the top global position in PC shipments and increased its market share to 25% in the fourth quarter of 2025, up from 24% a year earlier. Performance across the business segments contributed to overall earnings growth in the nine months ending March 2026. Revenue in the intelligent devices group rose 15% year-over-year, while revenue in the solutions and services group climbed 18% year-over-year over the same nine-month span. Fitch-defined EBITDA rose by 27% year-over-year to $3.7 billion in that period, even as the infrastructure solutions group widened its losses.
However, Fitch cautioned that PC unit volumes could contract in 2026 as rising memory prices weigh on demand. The agency expects memory pricing to increase by at least a high double-digit percentage in 2026. Lenovo itself anticipates mid-single-digit declines in PC shipments and is targeting a modest increase in PC revenue through a shift toward a higher premium mix and pricing actions.
On the earnings outlook, Fitch projects a 5% year-over-year decline in EBITDA for fiscal year 2027, followed by a modest recovery in fiscal year 2028. The agency forecasts that the solutions and services group will sustain average mid-teens annual revenue growth in fiscal years 2026 through 2029, driven primarily by managed services and project and solutions offerings. Those two areas together accounted for about 60% of the segment’s revenue in the third quarter of fiscal 2026, according to Fitch.
Restructuring and cost-streamlining measures in the infrastructure solutions group are expected to push that segment toward breakeven in the fourth quarter of fiscal 2026. Fitch anticipates gradual improvement thereafter, with profitability rising to a low single-digit margin by fiscal 2029.
Fitch’s assessment underscores Lenovo’s greater dependence on PC-related profit and cash generation relative to some peers. The agency highlighted that Dell Technologies and HP derive about 69% and 60% of segment profit, respectively, from non-PC businesses, compared with roughly 35% for Lenovo. Despite that heavier reliance on PC economics, Fitch expects Lenovo to sustain EBITDA gross leverage in a range of 1.0x to 1.3x over the next three years.
Liquidity and cash flow were also factored into the rating view. Fitch expects Lenovo to maintain sufficient liquidity headroom and pre-dividend free cash flow to support dividend payments, mergers and acquisitions and ongoing investment spending.
The ratings reflect Lenovo’s standalone credit profile. Legend Holdings Corporation holds a 32% stake in Lenovo and has two board seats, but Fitch indicates that Lenovo operates independently and that Legend’s representation on the board is not disproportionate.
Sector implications and financial posture
Fitch’s report highlights tensions between product-cycle headwinds in hardware and higher-growth, service-oriented revenue streams. The firm’s forecast of mid-teens revenue growth for solutions and services points to continued diversification in Lenovo’s revenue mix, even as the company remains more dependent on PC-driven cash flow and profitability than some competitors. Projections for leverage and liquidity suggest an expectation of balance-sheet resilience through the near-term earnings trough projected for fiscal 2027.