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Investing.com - Lucid Capital Markets upgraded Gladstone Capital (NASDAQ:GLAD) from Neutral to Buy while lowering its price target to $13.00 from $14.00, citing relative valuation and a post-earnings sell-off. The stock is currently trading at $19.18, near its 52-week low of $18.90, having declined 27.89% year-to-date according to InvestingPro data.
The research firm noted that Gladstone Commercial Corporation’s third-quarter 2025 results were in-line with expectations, maintaining its 2025 estimated core FFO at $1.38 while raising its 2026 estimate from $1.40 to $1.43 due to higher-than-expected cap rates on recent acquisitions. With a P/E ratio of 5.67 and an overall financial health score rated as "GREAT" by InvestingPro, the company appears financially stable heading into its next earnings report scheduled for November 13.
Gladstone continued its acquisition strategy in 2025, closing on $55 million in industrial acquisitions during the quarter, bringing its year-to-date acquisition volume to $206 million.
The $13 price target represents 76% of Lucid Capital Markets’ $17.00 NAV estimate and 9x 2026 estimated core FFO, compared to diversified REIT peers trading at 94% of NAV and 14x 2025 estimated AFFO.
Lucid Capital Markets projects AFFO dividend coverage of the current $1.20 per share annual dividend without additional incentive fee waivers, with a 93% payout projected in 2025, declining to 91% in 2026.
In other recent news, Gladstone Capital Corporation reported its Q3 2025 earnings, highlighting a 2.3% decline in total interest income to $20.9 million. The company’s net investment income was $11.3 million, or $0.50 per share. Additionally, Gladstone Capital has priced a public offering of $130 million in 5.875% convertible notes due 2030. The notes were priced at 98.5% of the principal value, and the offering size was increased from the initially announced $110 million. The underwriter has a 30-day option to purchase up to an additional $19.5 million in notes to cover potential overallotments. Prior to this, the company had announced the commencement of a registered public offering of $110 million in unsecured convertible notes. These notes are due in 2030 and will pay interest semi-annually. Upon conversion, Gladstone Capital may deliver cash, shares of common stock, or a combination, at its discretion.
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