Wells Fargo upgraded FS KKR Capital to Equal Weight with $15 price target

As previously reported, Wells Fargo analyst Finian O’Shea upgraded FS KKR Capital (FSK) to Equal Weight from Underweight with a $15 price target The firm notes that its previous downgrade to Underweight was predicated on visible credit concerns and a higher likelihood of a dividend cut. While there is potentially more to come on credit, its 0.68x NAV valuation leads to an unfavorable risk-reward skew, in Well’s view. FS foreshadowed its plan to reset the dividend alongside its Q3 results. This reset has the potential to come with larger near-term special dividends to clear part of its estimated spillover balance of about $1.60/share, the firm adds.