S&P upgrades Walt Disney to ‘A’ with stable outlook

S&P Global Ratings raised its ratings on Disney (DIS), including the issuer credit rating to “A” from “A-” and the short-term rating to ‘A-1’ from ‘A-2’. The stable outlook reflects expectations that Disney will maintain S&P Global Ratings-adjusted leverage below 2.5x and free operating cash flow to debt above 15% over the long term, the group stated. S&P added: “The Walt Disney Co. recently gave long-term earnings and cash flow guidance which indicates expectations that the company will be able to accelerate earnings growth while maintaining S&P Global Ratings-adjusted leverage below 2.5x, our upgrade threshold, over the long term. While leverage could temporarily rise if/when Disney makes its final payment to Comcast (CMCSA) Corp. for its ownership stake in Hulu, we do not expect leverage to exceed 2.5x. Disney plans to announce its CEO succession plans in early 2026. Regardless of the outcome we believe Disney’s leverage target, which aligns with the ‘A’ rating, is ingrained in the DNA of the company.”