Analyst Finian O’Shea of Wells Fargo maintained a Hold rating on Golub Capital Bdc (GBDC – Research Report), with a price target of $15.00.
Finian O’Shea’s Hold rating on Golub Capital BDC (GBDC) is driven by several distinct factors. First, GBDC has demonstrated stable credit and improved Net Operating Income (NOI) due to reduced base fees, which have led to higher-end Return on Equity (ROE) for the Business Development Company (BDC) industry. In addition, GBDC’s portfolio has seen net gains, contributing to an increase in its Net Asset Value (NAV). The company’s increased NOI can be largely attributed to the reduction of the base fee to 1%, which has been a significant contributor to the improved financial performance.
Furthermore, GBDC’s Payment In Kind (PIK) income has seen growth, likely due to one-time recognition of previously deferred interest on a non-accrual. The portfolio depreciation appears to be mostly driven by foreign exchange-related movements, but unrealized gains were broad-based and driven by spreads, which is consistent with peers. While GBDC has added new portfolio companies, the allocations were generally small due to its nearly full balance sheet. Lastly, Finian O’Shea has increased the NOI estimates for the coming financial year due to changes in the curve and a slower pace of deleveraging, but maintains a price target of $15, reflecting a 12% yield on forward NOI.
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Golub Capital Bdc (GBDC) Company Description:
Golub Capital BDC Inc engages in the business of investment. It seeks to create a portfolio that includes primarily senior secured and one stop loans. The company was founded in July 2007 and is headquartered in New York, NY.
Read More on GBDC:
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