MLV analyst Christopher Nolan came out again today with a research report on Prospect Capital Corporation (NASDAQ:PSEC), decreasing the price target to $9.00 (from $10.50), while maintaining a Buy rating on the stock. The report follows the company’s fiscal third-quarter earnings conference call. The company reported EPS of $0.24, which was below Nolan’s estimate of $0.27 and consensus mean of $0.26. However, the new price target represents a potential upside of 14% from where the stock is currently trading.
Nolan wrote, “PSEC remains focused on improving balance sheet yields and continuing to work towards the partial spinoff of most of its CLO, online lending and real estate assets into separately traded entities. Both of these are good near-term goals, particularly in light of the company’s highly levered balance sheet and low prospect of an accretive equity raise in the near term given the deep discount at which PSEC shares trade relative to NAV/share. How management addresses this valuation discount remains to be seen, but at the moment it is curtailing the company’s earnings growth prospects for 2015 and 2016. ”
“We are reducing our forward EPS estimates and price target due to lower asset growth and yield assumptions. We are maintaining our Buy rating on valuation.”, the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Christopher Nolan has a total average return of -1.6% and a 26.2% success rate. Nolan has a -4.0% average return when recommending PSEC, and is ranked #2945 out of 3596 analysts.