J.P. Morgan Raising Its Price Target On American Capital (ACAS)

J.P. Morgan Chase & Co. is raising its price target on shares of American Capital ACAS to $11 from $10, and is keeping its Overweight rating on shares. In a note to clients, J.P. Morgan writes, "ACAS reported $0.19 of NII per share for 4Q10 and received $474M in proceeds from investment paydowns/sales. ACAS continues to use the proceeds to reduce borrowing. Leverage has fallen to 0.6x D:E with no required principle payments until 2013. NAV/share increased 12% to $10.71 through a combination of unrealized gains and retained investment income. Given strong repayment activity over the past several quarters, we believe the company will be able to pay down debt more quickly than we previously assumed. We maintain our Overweight rating and are increasing our Dec 2011 price target to $11." Shares of ACAS gained 69 cents yesterday to close at $9.41, a gain of 7.9%.