S&P changes Wesco view to positive

S&P said it revised the outlook for Wesco International Inc. and its subsidiary Wesco Distribution Inc. to positive from stable and affirmed all their ratings.

“We expect a recovery in most of Wesco's end markets will support continued deleveraging over the next 12 months. After a roughly 7% pro forma revenue decline in 2020, the company's revenues returned to pre-pandemic levels in the first quarter of 2021. A growing backlog, along with positive macroeconomic indicators, suggests a recovery in most of the company's end markets is underway,” S&P said in a press release.

The agency said the outlook reflects the potential it could raise Wesco’s ratings if the company continues growing its EBITDA and generating healthy free cash flow such that it reduces its S&P Global Ratings' adjusted debt to EBITDA to below 5x, which are forecasted to occur in the first half of 2022, S&P said.

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