Analyst Bryce Rowe of B.Riley Financial reiterated a Hold rating on SLR Investment Corp. (SLRC – Research Report), with a price target of $15.00.
Bryce Rowe bestowed a Hold rating on SLR Investment Corp. (SLRC) based on several key factors. Firstly, he identifies a balanced risk/reward scenario due to the thin margin between the estimated Net Investment Income (NII) and the dividend. SLRC’s asset yield falls below the peer median, further contributing to a cautious outlook. The company’s track record of net asset value (NAV) per share compression also played a role in this rating. Rowe appreciates SLRC’s prudent approach, which has led to a diversified and unique investment strategy and portfolio. However, he suggests that an improvement in dividend coverage and a stabilization of the NAV could make the stock more appealing.
Rowe also notes that SLRC’s dividend coverage has been relatively thin, leaving little room for error. Comparatively, its coverage has been lower than the average coverage for their Business Development Company (BDC) coverage list. Improvement in this area could provide a catalyst for a more positive outlook on SLRC, considering its discounted price-to-net asset value (P/NAV) valuation. Furthermore, Rowe highlights that three out of four verticals within SLRC’s comprehensive portfolio have experienced modest net declines in the third quarter of 2023, while the sponsor finance portfolio supported a net increase in the comprehensive portfolio. Lastly, he points out a moderate decrease in net balance sheet leverage, which is near the top end of the targeted range. In conclusion, while there may be potential for growth and improvement, Rowe’s Hold rating is based on a conservative assessment of SLRC’s current financial landscape.
According to TipRanks, Rowe is a 5-star analyst with an average return of 16.4% and a 66.10% success rate. Rowe covers the Financial sector, focusing on stocks such as Newtek Business, Stellus Capital, and Runway Growth Finance Corp.
In another report released yesterday, Compass Point also maintained a Hold rating on the stock with a $14.50 price target.
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SLR Investment Corp. (SLRC) Company Description:
Solar Capital Ltd. is a closed-ened, externally managerd, non-diversified management investment company. The firm invests in in privately held U.S. middle-market companies. Its objective is to generate both current income and capital appreciation through debt and equity investments. The company was founded on November 2007 and is headquartered in New York, NY.
Read More on SLRC:
- Analyst Remarks, Loan Agreement Send Arcutis Biotherapeutics (NASDAQ:ARQT) Lower
- SLR Investment reports Q3 EPS 43c, consensus 43c
- SLRC Upcoming Earnings Report: What to Expect?
- SLR Investment price target raised to $15 from $14.50 at JPMorgan
- SLR Investment Corp. Schedules the Release of its Financial Results for the Quarter Ended September 30, 2023
