MLV analyst Christopher Nolan weighed in today with a few insights on Prospect Capital Corp. (NASDAQ:PSEC), as the company is scheduled to report its fiscal 2Q15 results on February 4th, after the close. The analyst rates the stock a Buy with a $10.75 price target, which reflects a potential upside of 28% from today’s closing price.

Nolan wrote, “We anticipate quarterly EPS will be $0.28, modestly above the consensus mean of $0.27. We believe investment yields and operating expenses will be a key swing factor for this quarter’s earnings while an increase in nonaccruals (as indicated by the company in a Dec. 8, 2014 press release) may be a catalyst for writedowns that could affect NAV/share.”

The analyst added, “We think investor attention will also focus on management’s comments on the upcoming spin-off of assets, and the strategy for PSEC to grow given a share price at a material discount to NAV while debt leverage ratios are high.”

Prospect Capital Corporation is a financial services company that primarily lends to and invests in middle market privately-held companies.