Wells Fargo analyst Finian O’Shea maintained a Buy rating on Sixth Street Specialty Lending (TSLX – Research Report) yesterday and set a price target of $21.00.
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Finian O’Shea has given his Buy rating due to a combination of factors influencing Sixth Street Specialty Lending’s performance. The company has demonstrated strong net operating income (NOI) results, surpassing expectations with an adjusted NOI of $0.58, driven by robust top-line performance and reduced interest expenses. Additionally, the activity-related fee income has remained significantly higher than the long-term average, contributing positively to the financial results.
Despite concerns about market competition, O’Shea remains confident in the company’s earnings potential, projecting a sustainable $0.50 earnings power. This confidence is bolstered by the company’s strategic focus on liability cost management and investment portfolio alpha, which has transitioned from a headwind during the Fed’s rate hikes to a tailwind as funding costs decline. Furthermore, the well-timed bond issuance and favorable facility pricing enhance the company’s financial positioning, supporting the Buy rating.
According to TipRanks, O’Shea is a 5-star analyst with an average return of 6.4% and a 56.44% success rate. O’Shea covers the Financial sector, focusing on stocks such as Barings BDC, Ares Capital, and BlackRock TCP Capital.
In another report released yesterday, KBW also maintained a Buy rating on the stock with a $23.00 price target.
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