Cantor analyst David Chiaverini initiated coverage on shares of Prospect Capital Corporation (NASDAQ:PSEC) with a Hold rating and a price target of $8.00, which implies an upside of 9% from current levels.
Chiaverini noted that his initial rating is based upon expectations that the company’s dividend may be cut following the contemplated spin-offs of its structured credit business, online lending business, and real estate business. However, despite these corporate actions, the analyst likes the company’s efficient use of its non-qualifying investment bucket and asset-sensitive balance sheet.
Furthermore, Chiaverini believes that the company makes the most efficient use of its non-qualifying 30% bucket of investments through its ownership of collateralized loan obligation (CLO) residual interests, its majority-owned consumer finance companies, including First Tower and Nationwide Acceptance, and its real estate investment trusts.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst David Chiaverini has a total average return of 11.5% and a 63.3% success rate. Chiaverini has a -5.6% average return when recommending PSEC, and is ranked #842 out of 3683 analysts.