Oppenheimer initiates Blue Owl Technology Finance with a Perform, $16 target

As previously reported, Oppenheimer initiated coverage of Blue Owl Technology Finance (OTF) with a Perform rating and $16 price target Blue Owl Technology Finance is an externally managed BDC that invests primarily in debt and, to a lesser extent, equity of U.S. technology-related companies, with a strategic focus on software. The firm estimates Blue Owl will likely earn $1.38 and $1.51 per share in 2025 and 2026, respectively, which equates to an ROE of 8.1% and 9.0%. In order to earn Oppenheimer’s estimated 9% ROE, Blue Owl needs to both increase its portfolio yield and leverage. The firm estimates that it can earn a 9.0% ROE and, given an estimated cost of equity capital of 9.5%, it calculates a fair value of $16/share, or 0.9-turns of book value.