Triangle Capital Corporation (TCAP) Price Target Lowered to $11.00 at National Securities
Triangle Capital Corporation (NYSE:TCAP) had its price objective cut by National Securities from $16.00 to $11.00 in a report released on Monday morning. They currently have a neutral rating on the credit services provider’s stock.
“• Triangle‘s NAV/share decreased by 10.9% Q/Q to $13.20 from $14.83, an astonishing drop that drove an annualized economic loss of 31.6% for 3Q17. We thought we were being conservative on 10/24/17 when, in the earnings preview, we forecasted NAV would close 9/30/17 at $14.21 and 2017 at $13.56 but it appears that we were overly optimistic in these assumptions.
• We also underestimated the dividend cut although it was refreshing to have the band aid pulled off. We had anticipated a reduction in the quarterly dividend to $0.36/share in 1Q18 but TCAP cut the dividend all the way to $0.30/share for 4Q17.
• There has been nothing short of a remarkable amount of “TCAP 1.0” (2014-2015 vintages) that have gone very bad very fast and we cannot help but expect many other pairs of shoes to drop given the current trajectory of asset quality. Additionally, as we have pointed out, the marks tend to get continually much more negative when an asset is placed on non-accrual status and we thus expect realized losses to outstrip reversals of unrealized depreciation and cause net losses to drive further NAV reductions.
• TCAP has enough headwinds in terms of the drag on earnings from troubled credits pulling down the overall portfolio yield, but as the company does more first lien and unitranche loans this will doubly pressure yield and any further uptick in credit quality could even put the $0.30/share quarterly dividend in jeopardy.
• While the company discussed the potential of strategic alternatives, such as joint venture (JV), merger, sale of loans, etc. we don’t think many of these are likely as any company capable of acquiring the company would likely not want to muddy up their balance sheet. Any assets the company is looking to sell would likely be those that could only be sold at a loss, and while a JV would work nicely for the unitranche book it would be too little too late, in our opinion.
• We are revising our 2017 NII/share estimate to $1.49 from $1.65 and our 2018 NII/share estimate to $1.27 from $1.60.,” National Securities’ analyst wrote.
TCAP has been the topic of a number of other reports. ValuEngine raised shares of Triangle Capital Corporation from a hold rating to a buy rating in a research report on Tuesday, August 1st. Zacks Investment Research raised shares of Triangle Capital Corporation from a sell rating to a hold rating in a research report on Wednesday, October 11th. Robert W. Baird raised shares of Triangle Capital Corporation from a neutral rating to an outperform rating and set a $16.00 target price on the stock in a research report on Monday, August 28th. Keefe, Bruyette & Woods downgraded shares of Triangle Capital Corporation from an outperform rating to a market perform rating and reduced their target price for the stock from $20.50 to $18.00 in a research report on Thursday, August 3rd. Finally, BidaskClub downgraded shares of Triangle Capital Corporation from a hold rating to a sell rating in a research report on Sunday, July 16th. Four analysts have rated the stock with a sell rating, four have given a hold rating and six have assigned a buy rating to the stock. The company presently has a consensus rating of Hold and a consensus target price of $16.57.
Shares of Triangle Capital Corporation (NYSE:TCAP) traded down $0.01 during trading on Monday, reaching $9.74. 771,371 shares of the company’s stock were exchanged, compared to its average volume of 632,994. The company has a current ratio of 56.98, a quick ratio of 56.98 and a debt-to-equity ratio of 0.87. The stock has a market cap of $458.79, a P/E ratio of 6.10, a P/E/G ratio of 1.26 and a beta of 0.91. Triangle Capital Corporation has a fifty-two week low of $8.91 and a fifty-two week high of $20.35.
Triangle Capital Corporation (NYSE:TCAP) last issued its quarterly earnings data on Wednesday, November 1st. The credit services provider reported $0.36 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.41 by ($0.05). The company had revenue of $29.88 million for the quarter, compared to analysts’ expectations of $32.84 million. Triangle Capital Corporation had a negative net margin of 36.80% and a positive return on equity of 10.67%. The firm’s revenue for the quarter was up 9.0% compared to the same quarter last year. During the same period in the previous year, the firm posted $0.41 earnings per share. sell-side analysts expect that Triangle Capital Corporation will post 1.56 EPS for the current fiscal year.
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The company also recently declared a quarterly dividend, which will be paid on Wednesday, December 20th. Investors of record on Wednesday, December 6th will be paid a $0.30 dividend. This represents a $1.20 dividend on an annualized basis and a yield of 12.32%. The ex-dividend date of this dividend is Tuesday, December 5th. Triangle Capital Corporation’s payout ratio is -200.00%.
A number of institutional investors have recently made changes to their positions in TCAP. State of New Jersey Common Pension Fund D boosted its stake in Triangle Capital Corporation by 262.5% in the 3rd quarter. State of New Jersey Common Pension Fund D now owns 1,450,000 shares of the credit services provider’s stock worth $20,706,000 after purchasing an additional 1,050,000 shares in the last quarter. Novare Capital Management LLC bought a new position in Triangle Capital Corporation in the 2nd quarter worth about $3,554,000. Muzinich & Co. Inc. boosted its stake in Triangle Capital Corporation by 8.8% in the 2nd quarter. Muzinich & Co. Inc. now owns 1,946,091 shares of the credit services provider’s stock worth $34,290,000 after purchasing an additional 157,458 shares in the last quarter. Bank of America Corp DE boosted its stake in Triangle Capital Corporation by 567.9% in the 1st quarter. Bank of America Corp DE now owns 169,483 shares of the credit services provider’s stock worth $3,236,000 after purchasing an additional 144,106 shares in the last quarter. Finally, First Personal Financial Services bought a new position in Triangle Capital Corporation in the 2nd quarter worth about $1,908,000. Institutional investors own 33.80% of the company’s stock.
Triangle Capital Corporation Company Profile
Triangle Capital Corporation is an internally managed, non-diversified closed-end management investment company. The Company is a specialty finance company that provides customized financing to lower middle market companies located primarily in the United States. The Company’s investment objective is to seek attractive returns by generating current income from its debt investments and capital appreciation from its equity-related investments.
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