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Investing.com - Keefe, Bruyette & Woods lowered its price target on PennantPark Floating Rate Capital (NYSE:PFLT) to $10.50 from $11.00 on Wednesday, while maintaining a Market Perform rating on the stock.
KBW cited a mixed quarter for the business development company, noting an earnings miss and slight portfolio depreciation, though it acknowledged that non-accruals had declined during the period. Despite challenges, InvestingPro data shows strong fundamentals with a 48.87% revenue growth and a P/E ratio of 12.15.
The firm highlighted that PennantPark has entered into a new joint venture (PSSL II), which could potentially help offset some of the spread compression expected across the sector depending on how aggressively it is ramped up.
KBW observed that PennantPark’s net investment income has been below its dividend for several quarters, and the firm’s forward estimates suggest this trend may continue.
Despite these challenges, the research firm noted that PennantPark believes it has the necessary levers to achieve full dividend coverage, suggesting a distribution reduction may not be expected next year, and that the company should be well-capitalized with balance sheet capacity given its ATM equity proceeds raised this year and the new joint venture. InvestingPro analysis confirms strong liquidity with a current ratio of 2.82, indicating robust financial health. For deeper insights and additional ProTips on PFLT’s financial outlook, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, PennantPark Floating Rate Capital Ltd reported its third-quarter 2025 earnings, which did not meet analyst expectations. The company announced an earnings per share (EPS) of $0.27, falling short of the forecasted $0.29. Additionally, revenue was reported at $63.5 million, which was below the anticipated $66.04 million. These figures highlight a shortfall in both earnings and revenue projections. The earnings announcement was followed by a decline in the company’s stock in after-hours trading. This development is crucial for investors monitoring PennantPark Floating Rate Capital’s financial performance.
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