Palmer Square initiated with a Neutral at UBS

UBS analyst Vilas Abraham initiated coverage of Palmer Square with a Neutral rating and $16.50 price target. The broadly syndicated loan strategy gives Palmer Square the ability to actively reposition the portfolio to manage risk, which should help reduce ROE volatility over time, the analyst tells investors in a research note. However, the the FY24 return on equity profile is roughly 100 basis points below the sector average and balance sheet leverage is at the high-end, which will likely limit valuation upside, the firm says.