Fitch changes Volvo view to stable

Fitch Ratings said it revised AB Volvo’s outlook to stable from positive while affirming the long-term issuer default rating at BBB+.

“The revised outlook to stable reflects our expectations that Volvo will not meet our positive rating sensitivities in the medium term due to the lockdown of production and the subsequent drop in revenue and profitability,” Fitch said in a press release.

The outlook also reflects the expectation of Volvo’s continued strong free cash flow (FCF) generation throughout the crisis despite a forecasted decline in profitability in 2020 with an only partial recovery from 2021 onwards, the agency said.

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