Wells Fargo downgrades Bain Capital Specialty Finance to Equal Weight

As previously reported, Wells Fargo analyst Finian O’Shea downgraded Bain Capital Specialty Finance (BCSF) to Equal Weight from Overweight with a price target of $14, down from $15. An M&A comeback and slower wealth channel flows may lessen the Spreadwinds, but for now the firm sees one more year of earnings turbulence. Wells was positive on Bain Capital Specialty Finance’s better middle market spreads and potential for expense improvement but while it continues to offer some excess spread from core middle market deal flow, progress on expenses is now a show-me. That impact will become more pronounced as all-in investment yields decline through Fed rate cuts.