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Research Update: LKQ Corporation Upgraded To 'BB+' From 'BB' On Declining Leverage And Strong Free Cash Flow; Outlook Stable

Published Feb 19, 2021

6 pages (2509 words) — Published Feb 19, 2021

Price US$ 225.00 | Buy this Report Now

About This Report

Abstract:

LKQ Corporation generated strong cash flows and paid down debt in 2020, resulting in stronger credit metrics despite the coronavirus pandemic. S&P Global Ratings now expects the company's debt to EBITDA to remain well below 3x and free operating cash flow (FOCF) to debt to remain above 15%. Therefore, we are raising our rating on LKQ to 'BB+' from 'BB' and our rating on its secured and unsecured debt to 'BB+' from 'BB'. The stable outlook reflects our expectation that LKQ will continue to demonstrate improved EBITDA margins with steady organic growth over the next 12 months. The stable outlook reflects our expectation that LKQ maintains its leverage of 2x-3x and an FOCF-to-debt ratio of more than 15%. It also

Brief Excerpt:

...- LKQ Corporation generated strong cash flows and paid down debt in 2020, resulting in stronger credit metrics despite the coronavirus pandemic. - S&P Global Ratings now expects the company's debt to EBITDA to remain well below 3x and free operating cash flow (FOCF) to debt to remain above 15%. - Therefore, we are raising our rating on LKQ to '##+' from '##' and our rating on its secured and unsecured debt to '##+' from '##'. - The stable outlook reflects our expectation that LKQ will continue to demonstrate improved EBITDA margins with steady organic growth over the next 12 months....

Report Type:

Research Update

Ticker

LKQX

Issuer

LKQ Corp.

GICS

Distributors (25501010)

Sector

Global Issuers

Country

United States

Region

United States

Format:

PDF

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S&P Global Ratings’ Credit Research—S&P Global Ratings’ credit research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P Global Ratings also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.

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Cite this Report


MLA:	S&P Global Ratings’ Credit Research. "Research Update: LKQ Corporation Upgraded To 'BB+' From 'BB' On Declining Leverage And Strong Free Cash Flow; Outlook Stable" Feb 19, 2021. Alacra Store. May 06, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-LKQ-Corporation-Upgraded-To-BB-From-BB-On-Declining-Leverage-And-Strong-Free-Cash-Flow-Outlook-Stable-2598347>

APA:	S&P Global Ratings’ Credit Research. (). Research Update: LKQ Corporation Upgraded To 'BB+' From 'BB' On Declining Leverage And Strong Free Cash Flow; Outlook Stable Feb 19, 2021. New York, NY: Alacra Store. Retrieved May 06, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Research-Update-LKQ-Corporation-Upgraded-To-BB-From-BB-On-Declining-Leverage-And-Strong-Free-Cash-Flow-Outlook-Stable-2598347>

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