Moody’s changes Eaton view to stable

Moody’s Investors Service said it changed the outlook for Eaton Corp. to stable from positive and affirmed all its ratings for the company, including the Baa1 senior unsecured debt rating.

“The current industrial downturn that has been deepened by the effects of coronavirus has halted Eaton’s path towards deleveraging and margin improvement and a credit profile supportive of a higher rating now seems unlikely for at least two years,” said David Berge, Moody’s a senior vice president and lead analyst for the company.

“While the sale of the hydraulics business later in the year will provide a significant cash injection for a company that otherwise maintains only modest cash reserves, there remains considerable uncertainty as to how these proceeds will be deployed,” added Berge.

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