UPDATE: Deutsche Bank Reiterates Buy Rating, Lowers PT on KKR Financial Holdings LLC on Disappointing 3Q Results, Attractive Valuation

In a report published Thursday, Deutsche Bank analyst Greg Poole reiterated a Buy rating on KKR Financial Holdings LLC KFN, but lowered the price target from $13.50 to $11.50. In the report, Deutsche Bank noted, “Maintain Buy given attractive valuation. KFN reported disappointing 3Q results as lower discount accretion and loan loss provisions resulted in NII and earnings below our estimate. BVPS remained flat seq. Going forward, KFN will focus on investments with higher cash yields, primarily bank loans and high yield debt, opportunistic credit, and specialty finance lending. We are reducing our estimates to reflect the new mix of future investments and reducing our price target multiple to reflect our lower ROE expectations. While we expect shares to be weak on the results, we are maintaining our Buy rating given the valuation relative to our new target.” KKR Financial Holdings LLC closed on Wednesday at $10.87.