New Mountain Finance double downgraded to Underperform at BofA

As previously reported, BofA double downgraded New Mountain Finance (NMFC) to Underperform from Buy with a price target of $10, down from $11.75. Due to multiple headwinds, profitability will continue to disappoint, resulting in a dividend reset and the shares re-rating lower, the analyst contends. While the firm previously thought New Mountain had multiple levers to resolve legacy credit and rotate out of non-earning equity investments over a “reasonable period,” it now thinks the timeline will be extended heading into a lower rate and spread backdrop, the analyst tells investors.