UBS has revised its price target for Kayne Anderson BDC (KBDC, Financial), reducing it from $16.50 to $16. The adjustment comes as part of a first-quarter earnings outlook for the business development company sector. Despite retaining a Neutral rating, the firm highlights the increased focus on credit quality predictions due to current economic uncertainties.
The analysis points out that while the recent decline in the sector has made valuations appealing, concerns over credit quality and reduced earnings from decreased short-term interest rates remain significant challenges. UBS notes that these issues are likely to continue affecting the sector's performance.
The revision in price targets is attributed to a slowing in loan growth and a lower anticipated return on equity, along with a decrease in target multiples amidst prevailing economic concerns.
