Wunderlich Securities Reiterates Buy, Lowers Price Target On Prospect Capital On Stable NAV Despite Significant Portfolio Cleanup

In a report published Monday, Wunderlich Securities analyst Merrill Ross reiterated a Buy rating on

, but lowered the price target from $13.00 to $11.50. In the report, Wunderlich Securities noted, "Buy-rated Prospect Capital (PSEC) reported net investment income of $0.25/ share for the quarter ended 12/31/14, in line with our estimate. The net increase in net assets (which included $133mm of realized losses and $128mm of unrealized appreciation) was a penny lower, at $0.24/sh. PSEC cleaned up a number of legacy situations in the quarter, and sold some of its CLO equity positions that were near the end of the reinvestment period at losses. Most of the unrealized appreciation was in areas related to consumer finance, where the low price of gas and higher employment are expected to have a positive impact. We are lowering our target, in part because the proposed spinouts are taking longer than we had expected, but we maintain a Buy rating." Prospect Capital closed on Friday at $8.63.