Clear Street on Crescent BDC (CCAP): 'Earnings Hold Steady as Valuation Remains Compelling'

Clear Street analyst Mickey Schleien reiterated a Buy rating and $15.50 price target on Crescent BDC (NASDAQ: CCAP).

The analyst comments "CCAP delivered steady 4Q25 results, reporting pre-tax NII per share of $0.46, flat sequentially, as a 1% decline in investment income driven by a 1% contraction in the average performing debt portfolio and a 40 bp decline in average yield to 10.0% from lower base rates was offset by a 1% reduction in expenses; NII yield remained good at 9.6%. The company generated $0.09 per share of realized gains from the exit of ASP MCS Acquisition but recorded ($0.30) per share of unrealized losses, primarily tied to new NPL mark-downs, resulting in EPS of $0.23 versus $0.42 in dividends and a 1% decline in NAV; ROAE was weak at 4.8%. Credit quality weakened modestly, with NPLs rising to 3.9% at cost (1.9% at fair value), though 89.7% of the portfolio remains in first lien and unitranche loans and the top 10 positions represent just 16% of assets. Net leverage was stable at 1.19x, with over $270 million of liquidity. While new investment spreads compressed to 4.9%, management cited improving deal flow and potential fee upside. CCAP is evaluating its fee structure in light of tight spreads in a competitive market with potentially lower base interest rates. We estimate that a 25 bp cut in the management fee to 1.00% would add 2¢-3¢ to quarterly NII per share. We maintain our $15.50 price target and BUY rating."

For an analyst ratings summary and ratings history on Crescent BDC click here. For more ratings news on Crescent BDC click here.

Shares of Crescent BDC closed at $13.27 yesterday.

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