Rating Confirmation
Moody’s Investors Service affirmed on 21 August 2026 that Polaris Inc. (NYSE:PII) retains its Baa3 long‑term issuer rating and its senior unsecured rating, and changed the rating outlook from negative to stable. The stable outlook is premised on an anticipated continuation of the sales recovery that began in Q3 2025, with further recovery expected throughout 2026 and 2027, aided by lower dealer inventory levels achieved over the prior two years.
Credit Metrics Outlook
Moody’s projects Polaris’s net‑debt‑to‑EBITDA leverage to fall to approximately 2.5 times by the end of 2027, down from 3.6 times for the twelve‑month period ended June 2026. The agency expects the company’s EBIT margin to improve to roughly 5‑6 percent in 2027, although it characterises profitability as still weak relative to the rating criteria.
Liquidity Position
At the end of June 2026 Polaris reported cash balances of $302 million and unused borrowing capacity of $931 million under its $1.4 billion revolving credit facility. Moody’s anticipates the firm will generate a moderately negative free‑cash‑flow position in 2026, with an improvement expected in 2027.
Market Position
The rating affirmation reflects Polaris’s dominant position in the North American powersports market, where it holds a commanding share of off‑road vehicles in both recreational and utility segments. Moody’s notes that demand in the powersports sector is highly discretionary and therefore sensitive to broader economic cycles.