Standard & Poor’s Ratings Services lifted its outlook on Mead Johnson Nutrition Co., a move that reflects the ratings agency’s view that the company will continue to improve its financial profile in the near to intermediate term.
“The outlook revision reflects Mead Johnson’s stronger credit measures, and our expectation that the company will improve its financial profile further, through a moderate financial policy and continued strong cash flow generation,” said S&P analyst Alison Sullivan.
The outlook on the consumer products company’s corporate credit rating–which stands at BBB, or two notches into investment-grade territory–was lifted to positive from stable.
The rating on Mead Johnson–which makes products such as Enfamil baby formula–reflects the company’s relatively narrow business focus in the infant formula and children’s nutrition markets, well-recognized but concentrated Enfa brand name, strong geographical diversification and good cash flow generation.
Mead Johnson separated from drug maker Bristol-Myers Squibb Co. last December in the fourth-largest split-off of the last two decades. The company last month reported its third-quarter profit grew 8.7 percent as sales rose on broad geographic strength.
Shares were recently down 1.9 percent to $59.01, alongside a broad market downturn. The stock is up 35 percent this year.
