Douglas Harter, an analyst from UBS, has initiated a new Hold rating on Blackstone Secured Lending Fund (BXSL).
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Douglas Harter has given his Hold rating due to a combination of factors influencing the Blackstone Secured Lending Fund. The fund’s strong credit quality track record is a positive aspect, supported by the quality of the Blackstone platform and a conservative strategy focusing on first lien loans. However, the potential for earnings risk, particularly related to a possible dividend reduction, limits the potential for multiple expansion and further upside in the stock price.
Additionally, the forecasted decrease in short-term rates and the refinancing of low-cost unsecured debt are expected to pressure earnings, potentially leading to a reduction in the base dividend. While the fund has significant spillover income that could support the dividend, management is expected to align payouts with the portfolio’s long-term earnings power. These factors contribute to the Hold rating, as the strong credit quality provides downside support, but the earnings risk prevents a more optimistic outlook.
In another report released on September 9, Wells Fargo also maintained a Hold rating on the stock with a $28.00 price target.