Analyst Derek Hewett from Bank of America Securities reiterated a Buy rating on Sixth Street Specialty Lending and keeping the price target at $24.50.
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Derek Hewett has given his Buy rating due to a combination of factors that highlight Sixth Street Specialty Lending’s strong performance and strategic positioning. The company reported a robust quarter with a GAAP return on equity of 14.7%, driven by portfolio gains and higher-than-expected prepayment and activity-based fees. This performance exceeded both Bank of America’s and consensus forecasts, indicating strong execution despite a challenging macroeconomic environment.
Additionally, the company’s credit quality remains solid with a significant reduction in non-accruals, which now stand at 2.1% of the portfolio compared to 3.7% previously. The restructuring of Lithium Technologies and its return to accrual status further underscores the effective risk management. The net asset value per share saw a modest increase, and the company continues to offer attractive dividends with strong coverage. These factors, combined with a maintained price objective of $24.50, support the Buy rating as TSLX is well-positioned for generating strong risk-adjusted returns.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $27.00 price target.
TSLX’s price has also changed slightly for the past six months – from $22.350 to $23.750, which is a 6.26% increase.