Bubble or no bubble, this is the best stock for AI exposure: analyst
Investing.com - Citizens has reiterated its Market Outperform rating on PennantPark Floating Rate Capital (NYSE:PFLT) with a price target of $11.00, representing a potential 21% upside from the current price of $9.10.
The financial services firm noted that PFLT is currently under-earning its quarterly dividend, generating $0.28 per share in net investment income compared to its $0.31 per share dividend payment.
Citizens expects this earnings gap to narrow over the next few quarters as net investment income normalizes further, potentially bringing the dividend coverage ratio back to approximately 100% by mid-2026.
The firm anticipates PennantPark will maintain its $1.23 per share annual dividend, which represents a 13.5% dividend yield at current share prices.
The assessment suggests Citizens believes the market will respond positively once PennantPark achieves full dividend coverage, supporting its continued bullish outlook on the stock.
In other recent news, PennantPark Floating Rate Capital Ltd reported its fourth-quarter earnings for 2025, surpassing Wall Street expectations. The company achieved an earnings per share of $0.31, which was higher than the anticipated $0.29, resulting in a 6.9% earnings surprise. Revenue figures also exceeded predictions, coming in at $68.98 million compared to the forecasted $67.47 million. These results indicate stronger-than-expected financial performance for the company. Despite the positive earnings and revenue results, the stock experienced a decline in after-hours trading. Analysts had projected these figures, and the company managed to outperform those estimates. Such developments are crucial for investors as they assess the company’s financial health and future prospects.
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