On Monday, Keefe, Bruyette & Woods adjusted its stock price target for Sixth Street Specialty Lending (NYSE:TSLX), moving it to $23.00 from the previous $23.50. Despite this change, the firm maintains an Outperform rating on the stock.
The revision follows Sixth Street Specialty Lending's recent earnings report, which presented mixed outcomes. The company experienced an earnings miss, the addition of a new non-accrual, and spread compression, factors that influenced the quarter's performance negatively.
Still, it was not all negative for Sixth Street Specialty Lending, as the company's Net Asset Value (NAV) saw a slight increase of 0.8%. This modest growth comes amidst a backdrop of historically strong results from TSLX, setting a high standard for the company based on past investor expectations.
Keefe, Bruyette & Woods noted that as the market endures a higher-for-longer interest rate scenario, a growing dispersion among private credit managers is expected. This could potentially lead to more opportunistic deals for firms like TSLX.
The firm's decision to lower its estimates for Sixth Street Specialty Lending is based on anticipated spread compression. Despite the reduced stock price target, Keefe, Bruyette & Woods expressed a continued positive outlook on the company's shares. The firm's stance is supported by TSLX's strong historical performance in the private credit sector.
In summary, while Keefe, Bruyette & Woods has slightly lowered its expectations for Sixth Street Specialty Lending by adjusting the stock price target to $23.00, their Outperform rating remains unchanged. The firm encourages continued investment in TSLX, citing the company's robust track record.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.