The UBS analyst sees accruals pressured interest revenue resulting in $0.20 a share of core EPS. With the recent disclosure of its president and CIO, Goldthorpe, the analyst remains confident regarding the appointments of Howard Windra as president and Tanner Powell as CIO.
"With the recently announced resignation of President/CIO Ted Goldthorpe and appointments of Howard Widra as President and Tanner Powell as CIO, we believe it is likely the new management team will accelerate efforts to reduce oil and gas exposure, which may reduce near term earnings and pressure the dividend," according to Herbert.
As a result, the brokerage said, "We are lowering our FY2017 NAV and core EPS estimates by 10.6 percent and 12.5 percent, respectively [...] stock remains undervalued given BV disconnect, proactive management despite our estimate revisions and continued weakness from oil and gas credits, we believe AINV is undervalued at an approximate 25 percent discount to book value," the analyst said.
Also, the analyst thinks "the focus on curing oil and gas portfolio may supersede Maintenance of Dividend 1Q16 (FY16) core earnings equaled the quarterly dividend after exceeding it for 19 consecutive quarters. Taken with comments on the earnings call that the focus will be curing the portfolio and stabilizing NAV and a possible effort by the new management team to prune the portfolio, we believe the dividend is slightly more at risk quarter-over-quarter."
At time of writing, Apollo was up 1.82 percent at $5.58.
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