UPDATE: UBS Downgrades Patriot National (PN) to Neutral

November 16, 2016 6:58 AM EST
Get Alerts PN Hot Sheet
Price: $4.60 -3.56%

Rating Summary:
    3 Buy, 3 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 22 | New: 54
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(Updated - November 16, 2016 9:04 AM EST)

UBS downgraded Patriot National (NYSE: PN) from Buy to Neutral with a price target of $6.50 (from $12.00). Analyst Brian Meredith thinks its credit facility will be a drag on earnings.

"We estimate that the new term loan will lower our 2017 and 2018 EPS estimates by approximately 25% due to both the higher interest rate (8.25% versus 3.94% on the old BMO term loan) and increased debt load. The new credit facility increases our estimated 2017 interest expense from $7.5mm to $20.1mm, which negatively affects our 2017 EPS estimate by $0.28/sh. We estimate that the special dividend will consume $67mm of the cash on hand, with interest and amortization hurting cash flow by $26mm in 2017 and $28.5mm in 2018, hurting PN's financial flexibility," said Meredith.

For an analyst ratings summary and ratings history on Patriot National click here. For more ratings news on Patriot National click here.

Shares of Patriot National closed at $6.29 yesterday.

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