S&P downgrades Tempo purchase to B+ on weak 4Q results

S&P downgrades Tempo purchase to B+ on weak 4Q results

S&P Global Downgrades Tempo Performance Materials to 'B+' Amid Weak Fourth-Quarter Results

S&P Global Ratings downgraded Tempo Performance Materials to 'B+' from 'BAA-', citing underwhelming financial performance in the fourth quarter of 2025. The move reflects concerns over the company's ability to sustain profitability amid challenging market conditions and operational headwinds.

The downgrade follows a period of economic resilience in broader markets, where U.S. stocks, including the S&P 500, surged nearly 9% in Q2 2023 amid easing recession fears and strong corporate earnings. However, Tempo's results diverged from this trend, with weak revenue growth and margin compression in its latest quarter. Analysts attribute the decline to persistent inflation, elevated input costs, and soft demand in key markets, including industrial and consumer discretionary sectors.

S&P noted that the company's leverage ratios have worsened, with debt levels rising relative to EBITDA, limiting flexibility to invest in growth initiatives or navigate macroeconomic volatility. While Tempo has taken steps to streamline operations and reduce costs, the agency emphasized that these measures may not be sufficient to restore creditworthiness to investment-grade levels without sustained earnings improvement.

The downgrade aligns with broader trends in global credit markets, where bond yields climbed in Q2 2023 as central banks maintained hawkish policies to combat inflation. Investors are now scrutinizing Tempo's ability to compete in a high-interest-rate environment, particularly as access to capital becomes more costly.

For now, S&P has placed Tempo on negative credit watch, signaling potential further downgrades if financial metrics fail to stabilize. Investors are advised to monitor the company's Q1 2026 earnings and strategic adjustments in response to evolving market dynamics.

(https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/2397286): S&P Global Ratings downgrade announcement.
(https://www.americancentury.com/insights/quarterly-performance-update/): Q4 2025 market performance data from American Century Investments.