As PennantPark Risk/Reward Balances, D.A. Davidson Downgrades To Neutral

D.A. Davidson downgraded
PennantPark Investment Corp.PNNT
to Neutral from Buy to reflect recent outperformance of shares, which, according to the analysts, gives a more balanced risk/reward given remaining oil and gas exposures.

"PNNT's year-to-date total return (including dividends) of 30.5 percent compares to an average total return of 9.8 percent for other BDCs in our coverage and 7.4 percent for the S&P 500," wrote D.A. Davidson.

Related Link: JPMorgan Downgrades PennantPark To Neutral

The analysts believe the valuation is appropriate, despite trading at a 84 percent discount to NAV, taking into account the company's remaining exposure to oil and gas investments at 15 percent of cost and 9 percent of fair value.

The company has a 12–18-month price target of $7 on PennantPark shares.

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Posted In: D.A. DavidsongasOilAnalyst ColorDowngradesCommoditiesMarketsAnalyst RatingsTech