Oppenheimer initiates Blue Owl Capital Corporation III with an Outperform

As previously reported, Oppenheimer initiated coverage of Blue Owl Capital Corporation III with an Outperform rating and $16 price target. Blue Owl Capital Corporation III is an externally managed BDC that invests in senior secured or unsecured loans, subordinated loans, or mezzanine loans and, to a lesser extent, equity and equity-related securities and warrants, the firm says. Oppenheimer estimates it will likely earn $1.72 and $1.67 per share in 2024 and 2025, respectively, which equates to an ROE of 11.0% and 10.6%. The firm further estimates that Blue Owl Capital can earn a 9.5% ROE and, given an estimated cost of equity capital of 9%, it calculates a fair value of $16/share, or 1.03-times of book value.