With Its Price Target Reached, Oppenheimer Downgrades Horizon Technology

According to the brokerage, shares of Horizon trade at 1.03x NAV, a 12 percent premium to the industry average of 0.92x, and reached the earlier price target of $14.

"We stress that is purely a valuation call: the company is performing well from both an earnings and credit perspective, but we don't believe 2017 will have an earnings catalyst to justify further premium above NAV," analyst Chris Kotowski wrote in a note.

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However, the analyst likes the company's venture lending business model, which provides good "uncorrelated returns with higher-than-average investment yields."

Further, Kotowski noted that the cautious tone of the management about deploying capital in the current low growth environment is unlikely to impact the company's ability to cover the dividend out of NII in the near term. As such, the analyst views the company's 10.0 percent indicated yield as secure.

At the time of writing, shares of Horizon fell 3.22 percent to $13.26.

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