UPDATE: Stifel Nicolaus Downgrades MCG Capital to Hold

Stifel Nicolaus lowers its rating on MCG Capital

to Hold from Buy as current valuation allows for limited upside. Stifel Nicolaus notes, "Given the recent strength in valuation we don't believe the expected upside potential from current levels warrants a Buy rating give the higher risk profile of MGCG. Our previous target price of $5.50 represents about 10% upside from current levels which combined with the expected 2012 dividend of $0.56-$0.60 per share would imply an expected total return of 20+%. This is good, but not quite good enough to warrant a Buy rating given the risks and volatility we expect in MCGC." MCGC closed at $5.01 a share on Friday.