Main Street Capital on track to snap its 6-day winning streak

Main Street Capital (NYSE:MAIN) is on track to snap its 6-day winning streak.

The business development company declined by 1.11% on Monday afternoon to $45.31 after having steadily risen over the course of 6 trading days. The stock had gained ~5% in the 6-days time, reaching a 52-week high of $45.91 on Friday Jan. 26.

The stock is still trading 11% above its 200-day simple moving average. Short interest on the stock stands at 4.44% of the total float.

Notably, peers Ares Capital (ARCC), Golub Capital (GBDC) and Sixth Street Specialty Lending (TSLX) are also down today.

Main Street is scheduled to announce its Q4 earnings on Feb. 22. A near record net investment income has been estimated in Q4, and the BDC said it originated new or increased commitments in its private loan portfolio during the quarter.

Seeking Alpha authors and the Quant Rating system give the stock a Buy rating. Meanwhile, sell-side analysts give it a Hold rating, with average price target of $44.50.

B. Riley analyst Bryce Rowe had lowered his ratings on BDCs, raising concerns about how lower short-term rates could adversely impact BDC earnings, "but more importantly, a faster pace of Fed rate cuts could coincide with deteriorating macro conditions."

On the valuation front, Rowe believes upside for the group is limited on a price-to-NAV basis.

The debt structure for MAIN is a potential problem, according to SA author Roberts Berzins.

Given the current macroeconomic environment where short-term interest rates are likely to fall in the near future and we face a real risk of falling into recession, we do not think that MAIN deserves to trade at nearly the premium it currently enjoys, SA contributor Samuel Smith said.