Lenovo Group to Absorb US Tariff Impact, S&P Says

MT Newswires Live2025-02-26

Lenovo Group (HKG:0992) should keep a stable credit profile despite US tariffs on Chinese imports, S&P Global Ratings said in a Wednesday release.

The rating agency expects the PC hardware company to transfer some tariff-tied costs to consumers, with the impact on sales and EBITDA seen to be modest.

Lenovo may adjust pricing due to the PC industry's low operating margins and the concentration of global PC production in China, S&P said.

The impact of higher tariffs should be more visible on consumer sales given higher price sensitivity compared to enterprises, the rating agency said.

The potential 25% US tariff on Mexican imports could also squeeze Lenovo's server sales given that a large portion of its US-bound servers are likely produced in Mexico, S&P said.

The rating agency continues to forecast PC revenue growth of above 10%, EBITDA growth of about 9%, and leverage of about 0.6x for fiscal 2026.

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