Sell Rating for TCG BDC Amidst Rising Interest Expenses and Portfolio Challenges

Derek Hewett, an analyst from Bank of America Securities, reiterated the Sell rating on TCG BDC (CGBD – Research Report). The associated price target is $14.00.

Derek Hewett has given his Sell rating due to a combination of factors affecting TCG BDC’s financial performance. The company’s adjusted core EPS fell short of expectations, primarily due to increased interest expenses, while GAAP EPS was negatively impacted by portfolio depreciation. Additionally, there was a rise in non-accrual investments, which now constitute a larger portion of the portfolio, and a decline in NAV per share.
Furthermore, the completion of the CSL3 merger introduces uncertainties regarding near-term profitability and technical challenges. The analyst also lowered future earnings estimates and the price objective, reflecting a cautious outlook on the company’s ability to maintain its financial health amidst these challenges. These factors collectively contribute to the underperformance rating and the decision to recommend selling the stock.

In another report released on May 8, J.P. Morgan also maintained a Sell rating on the stock with a $13.50 price target.

CGBD’s price has also changed moderately for the past six months – from $16.530 to $14.180, which is a -14.22% drop .