Gold prices steady, holding sharp gains in wake of soft U.S. jobs data
On Wednesday, JPMorgan reiterated its Underweight rating on WhiteHorse Finance (NASDAQ:WHF) with a steady price target of $9.00. According to InvestingPro data, WHF, currently valued at $215.7M, has maintained dividend payments for 14 consecutive years despite challenges. WhiteHorse Finance reported first-quarter 2025 net investment income (NII) of $0.29 per share, which fell short of the consensus estimate of $0.33 and JPMorgan’s expectation of $0.34. The company’s net asset value (NAV) per share also saw a decline, dropping by 1.6% sequentially to $12.11, marginally below JPMorgan’s forecast of $12.17.
Despite the lower-than-anticipated financial results, WhiteHorse Finance has maintained its regular quarterly distribution of $0.385 per share for the second quarter of 2025. The price target set by JPMorgan is based on a 0.75x target multiple applied to their year-end 2025 NAV estimate of $11.83. This target suggests an annualized total return of 16%.
The firm noted management’s remarks on the ongoing review of the portfolio’s earnings capability in the near to medium term. While there is uncertainty about a potential dividend cut, JPMorgan acknowledged the possibility that the Board might use the remaining spillover income, estimated at $26.3 million or approximately $1.13 per share, to supplement NII and maintain the dividend at its current rate until there is greater clarity on non-accruals and interest rates.
JPMorgan emphasized that investor focus is expected to remain on dividend coverage through NII and credit trends. The firm anticipates that challenges to multiple expansion will persist until dividend coverage through NII is secured and NAV stabilizes. For deeper insights into WHF’s financial health (currently rated FAIR by InvestingPro) and comprehensive analysis of its dividend sustainability, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, WhiteHorse Finance announced its Q1 2025 earnings, reporting an earnings per share (EPS) of $0.29, which fell short of the analyst forecast of $0.34. The company’s revenue also missed expectations, coming in at $18.8 million compared to the anticipated $20.17 million. The company’s net asset value (NAV) per share decreased by 1.6% from the previous quarter, reflecting a decline in asset value amid a sluggish mergers and acquisitions (M&A) market. Analysts have noted the challenges posed by nonaccrual investments, which currently affect 8.8% of WhiteHorse Finance’s debt portfolio. The company has a pipeline of 75 deals, slightly below its typical range, with limited balance sheet capacity for new assets. CEO Stuart Aronson highlighted ongoing efforts to improve asset quality, particularly focusing on reducing nonaccrual investments. The company anticipates muted M&A activity over the next 60 to 90 days, which could potentially impact future earnings.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.