Wells Fargo Downgrades Fifth Street Finance (FSC) to Market Perform; Expected Dividend Cut

Wells Fargo downgraded Fifth Street Finance (NYSE: FSC) from Outperform to Market Perform, price target range lowered to $10-50- $11.50 from $12-13.

Wells analyst says, "Downgrading rating on FSC to Market Perform based on (1) the expectation of a near-term dividend cut to $1.20/share, down from $1.28, and (2) our belief there are better risk-adjusted returns in the BDC space. Based on our modeling, FSC will not cover the $1.28/share dividend from NOI in 2011/2012. Lowering 2011/2012 earnings estimates to $1.03/$1.19, from $1.06/$1.29, given (1) FSC's focus on lower-yielding assets, (2) slower than expected capital deployment due an inability to raise equity, and (3) higher cost liability structure."

For more ratings news on Fifth Street Finance click here and for the rating history of Fifth Street Finance click here.

Shares of Fifth Street Finance closed at $9.77 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• Zeo Energy Corp (ZEO) Misses Q2 EPS by 7c
• Reading (RDI) Tops Q2 EPS by 4c