On Monday, B.Riley adjusted its price target on Runway Growth Finance Corp. (NASDAQ:RWAY) shares , bringing it down to $12.50 from the previous $13.50. The firm has maintained a Neutral rating on the stock.
This change follows the company's first-quarter earnings report released on May 7 and a subsequent offering of secondary shares by RWAY's largest shareholder, OCM Growth Holdings, on May 9.
OCM Growth Holdings, after the offering, still holds a significant stake in Runway Growth Finance, with 11.2 million shares or 28% of the company's outstanding shares. B.Riley acknowledges Runway's solid fundamentals, including its lower balance sheet leverage, robust dividend coverage, and strong liquidity position.
The new price target of $12.50 equates to 94% of the company's net asset value (NAV) per share. This valuation is derived from a weighted average of various price to NAV scenarios.
B.Riley's stance on the stock remains cautious due to what it identifies as a difficult and uncertain macroeconomic environment, along with the potential for limited price appreciation until OCM's considerable holdings are further reduced.
Investors are watching Runway Growth Finance closely as it navigates through these market conditions, with the firm's cautious outlook reflecting broader concerns about the economic landscape and its impact on the company's stock performance.
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