Wells Fargo Downgrades Prospect Capital (PSEC) to Market Perform; Credit Quality Stable But Write-Downs Could Linger
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Wells Fargo downgrades Prospect Capital (Nasdaq: PSEC) from Outperform to Market Perform. Valuation range lowered to $10-11 from $11-12.
Wells analyst says, "Our downgrade is driven by: (1) the potential for future equity capital raises, (2) the growing disparity between NII and the dividend and (3) potential book value deterioration from investment depreciation. We are also lowering our FY2010 estimate to $1.16 from $1.25 and our FY2011 estimate to $1.30 from $1.36. While we believe hidden value remains in PSEC’s underleveraged balance sheet, it will likely be some time before the company can secure incremental financing, in our view...While the company's favorable growth outlook and underleveraged balance sheet are clear positives, the potential for future equity capital raises and investment write-downs are likely to keep the shares range bound."
To see more analyst ratings on PSEC Click Here.
Prospect Capital Corporation is a venture capital and private equity investment firm specializing in late venture, middle market, mature, mezzanine, buyouts, and bridge transactions.
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