UPDATE: Bank of America Reiterates Buy Rating, Lowers PT on THL Credit as Upside is Not Reflected in Valuation

In a report published Thursday, Bank of America analyst Kenneth Bruce reiterated a Buy rating on

, but lowered the price target from $16.00 to $14.75. In the report, Bank of America noted, “TCRD reported Q1'14 Core EPS of $0.32 vs. the Street at $0.33. Results were mixed as credit weakness and lower yields limited the top line, but robust originations and greater leverage drove good balance sheet growth. We remain constructive on TCRD based on valuation and expect fundamentals will improve in 2H14. Still, investor sentiment is predictably poor due to short term technical pressure from losing index eligibility and the overhang from margin erosion. Since the Russell announcement, short interest is up ~106% to 4.3% of the float and the shares have underperformed. That said, technical selling pressure should fall following reconstitution and could be a catalyst for better share performance. Yield pressure remains a concern given the competitive environment, but in our view, TCRD is better positioned than most to grow the top line. TCRD's niche focus on the lower end of the middle market generates greater pricing power, in our view. Plus, its origination platform can offset some yield pressure with growth.” THL Credit closed on Wednesday at $12.94.