Prospect Capital Q1 net investment income per share declines; co posts net loss

Overview

• U.S. middle-market lender's fiscal Q1 net investment income per share fell yr/yr

• Company posted net loss attributable to common shareholders for the quarter, compared to a profit last year

• Board increased share repurchase program to $200 mln

Outlook

• Company did not provide specific financial guidance for upcoming quarters or full year in its press release

Result Drivers

• PORTFOLIO ROTATION - Co increased focus on first lien senior secured middle market loans and reduced exposure to second lien and subordinated structured notes

• AI AND AUTOMATION - Co said adoption of AI and automation initiatives aimed to improve portfolio company revenues and cost efficiencies

• DEBT REDUCTION - Co reduced outstanding debt principal by 18% during the quarter, improving asset coverage ratios

Company press release:

Key Details

Analyst Coverage

• The one available analyst rating on the shares is "sell"

• The average consensus recommendation for the closed end funds peer group is "buy."

• Wall Street's median 12-month price target for Prospect Capital Corporation is $2.00, about 29% above its November 3 closing price of $1.55

• The stock recently traded at 4 times the next 12-month earnings vs. a P/E of 6 three months ago

Reuters Recommended Reads

• Nov 4 - TriplePoint Venture Growth Q3 net investment income falls, NAV per share declines

• Nov 2 - New Mountain Finance Q3 adjusted net investment income falls YoY

• Nov 3 - SLR Investment Q3 investment income falls on smaller portfolio

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)