Analyst Finian O’Shea of Wells Fargo maintained a Sell rating on FS KKR Capital (FSK – Research Report), reducing the price target to $18.00.
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Finian O’Shea has given his Sell rating due to a combination of factors impacting FS KKR Capital. Despite a potentially attractive NAV discount, the company faces high losses and fees, which are concerning. The reported adjusted NOI slightly exceeded expectations, but the company’s increased leverage and joint venture activities suggest a cautious outlook, especially with significant legacy exposures and anticipated lower base rates affecting future performance.
Moreover, while there are some positives such as improved valuations in certain investments, credit headwinds persist with familiar names experiencing declines. The new deal spreads are not particularly appealing given FSK’s higher base fee, and the rate curve trends lower. Consequently, the price target remains unchanged at $18, reflecting a 13.5% NTM NOI yield, and the Underweight rating is maintained.
According to TipRanks, O’Shea is a 4-star analyst with an average return of 6.5% and a 56.74% success rate. O’Shea covers the Financial sector, focusing on stocks such as TriplePoint Venture Growth, FS KKR Capital, and Bain Capital Specialty Finance.