Prospect Capital Corporation’s Valuation Is Attractive: MLV
In a research report issued today, MLV analyst Christopher Nolan maintained a Buy rating on Prospect Capital Corporation (NASDAQ:PSEC) with a price target of $10.50, which represents a potential upside of 31% from where the stock is currently trading. The report follows the company’s fiscal 3Q15 results, showing net investment income EPS of $0.24, below Nolan’s estimate of $0.27 and the consensus expectation of $0.26.
Nolan stated, “At first look, quarterly results demonstrated slowing revenue generation relative to prior quarters with the EPS miss due to lower origination and prepayment fees. Asset quality was reportedly good for both the CLO equity book as well as the remainder of PSEC’s investments book with no material change in aggregate non-accruals since last quarter. In our view, the outlook for the dividend is tenuous given only taxable income of $0.26/share exceeded the quarterly dividend payout of $0.25/share and not GAAP EPS.”
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 -2.1% and a 30.0% success rate. Nolan has a -7.7% average return when recommending PSEC, and is ranked #3008 out of 3594 analysts.
Out of the 4 analysts polled by TipRanks, three rate Prospect stock a Buy and one recommends a Hold. With a return potential of 31.09%, the stock’s 12-month consensus target price stands at $10.50. KBW analyst Greg Mason also weighed in on the stock back in February 10, maintaining a Hold rating, with a $9.50 price target. The stock is currently up 2.89% at $8.00.