UPDATE: Stifel Nicolaus Upgrades KCAP Financial's Rating

According to a report published Friday, Stifel Nicolaus has upgraded KCAP Financial's (NASDAQ: KCAP) rating to Buy while maintaining a price target of $9.50

In the report, Stiefl Nicolaus writes, "Our $9.50 target price uses an 11% earnings yield on our 2013 estimate which is still a 10+% discount from the BDC average of 9.9% earnings yield on 2013 estimates. Risks to our target price include credit deterioration in KCAPs loan portoflio, KCAP not able to raise additional funds under its asset manager, the CLO equity income from pre-crisis investments running-off faster than we anticipate, KCAP recieveing incentive fees from its assetments at a rate lower than we anticipate or not at all and general market and economic risks."

KCAP Financial traded around $8 Friday.

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