Goldman Sachs BDC (NYSE:GSBD)‘s stock had its “buy” rating reiterated by analysts at National Securities in a research note issued to investors on Monday. They currently have a $23.00 target price on the financial services provider’s stock. National Securities’ target price would indicate a potential upside of 3.46% from the stock’s previous close.
The analysts wrote, “ For 3Q18, GSBD posted $0.54/share of NII, three cents above our estimate and comfortably above the $0.45/share quarterly dividend. Sales and repayments totaled $111.1 million on the quarter, up from $78.8 million Q/Q and we expect that this increased prepayment activity drove acceleration of unamortized OID and the earnings beat.
Despite more sales and repayments, GSBD originated $189.1 million of loans during the quarter and the portfolio at cost grew to $1.34 billion from $1.26 billion the quarter prior. We expect the portfolio at cost to finish 2019 at $1.46 billion.
Much of the earnings growth came from first lien loans which comprised 46.3% of the portfolio at fair value from 36.2% Q/Q. Goldman is utilizing the reduced asset coverage afforded to them combined with their reduced base fee (to 100 bps from 150 bps) to increase the Sharpe ratio of the portfolio. Management has stated that balance sheet leverage will be determined by the portfolio composition and we thus expect Goldman’s first lien exposure to continue to increase through 2019 along with D/E.
We think NII ROAE will be flat Y/Y in 2019 but think on a risk-adjusted basis this will improve as the ROAE will be attained with a much higher composition of first lien loans.
GSBD’s NAV/share was up 5 cents per share Q/Q to $18.13 and asset quality remains strong with only one company, Kawa Solar, on non-accrual representing 0.7% of the portfolio at cost.
We are revising our 2018 NII/share estimate to $2.06 from $2.00 and our 2019 NII/share estimate to $2.09 from $2.14 and maintaining our BUY rating and $23 price target.”
A number of other equities analysts have also recently issued reports on GSBD. Zacks Investment Research upgraded shares of Goldman Sachs BDC from a “hold” rating to a “buy” rating and set a $24.00 target price for the company in a research report on Thursday, August 2nd. Wells Fargo & Co upgraded shares of Goldman Sachs BDC from a “market perform” rating to an “outperform” rating and lifted their target price for the stock from $20.00 to $21.75 in a research report on Monday. Goldman Sachs Group lifted their target price on shares of Goldman Sachs BDC and gave the stock an “outperform” rating in a research report on Monday. Finally, Citigroup assumed coverage on shares of Goldman Sachs BDC in a research report on Thursday, August 23rd. They set a “neutral” rating and a $23.00 target price for the company. One equities research analyst has rated the stock with a sell rating, four have assigned a hold rating, four have assigned a buy rating and one has given a strong buy rating to the company. Goldman Sachs BDC currently has a consensus rating of “Buy” and an average target price of $22.96.
GSBD stock opened at $22.23 on Monday. The stock has a market cap of $857.78 million, a P/E ratio of 10.74, a P/E/G ratio of 5.38 and a beta of 0.82. Goldman Sachs BDC has a 52 week low of $18.78 and a 52 week high of $22.75. The company has a current ratio of 0.60, a quick ratio of 0.60 and a debt-to-equity ratio of 0.79.
Goldman Sachs BDC (NYSE:GSBD) last announced its earnings results on Thursday, November 1st. The financial services provider reported $0.54 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.51 by $0.03. The company had revenue of $38.00 million during the quarter, compared to analysts’ expectations of $36.84 million. Goldman Sachs BDC had a net margin of 46.38% and a return on equity of 10.93%. The firm’s quarterly revenue was up 10.5% compared to the same quarter last year. During the same quarter in the previous year, the business posted $0.47 earnings per share. On average, equities analysts predict that Goldman Sachs BDC will post 1.99 earnings per share for the current year.
A number of institutional investors and hedge funds have recently made changes to their positions in GSBD. CIBC World Markets Inc. raised its position in shares of Goldman Sachs BDC by 4.7% in the second quarter. CIBC World Markets Inc. now owns 425,335 shares of the financial services provider’s stock valued at $8,711,000 after buying an additional 18,990 shares during the last quarter. Van ECK Associates Corp raised its position in shares of Goldman Sachs BDC by 1.7% in the second quarter. Van ECK Associates Corp now owns 253,565 shares of the financial services provider’s stock valued at $5,193,000 after buying an additional 4,322 shares during the last quarter. Mckinley Capital Management LLC Delaware raised its position in shares of Goldman Sachs BDC by 8.5% in the second quarter. Mckinley Capital Management LLC Delaware now owns 178,913 shares of the financial services provider’s stock valued at $3,664,000 after buying an additional 14,090 shares during the last quarter. Private Advisor Group LLC raised its position in shares of Goldman Sachs BDC by 100.3% in the third quarter. Private Advisor Group LLC now owns 165,729 shares of the financial services provider’s stock valued at $3,676,000 after buying an additional 82,999 shares during the last quarter. Finally, Legal & General Group Plc raised its position in shares of Goldman Sachs BDC by 9.4% in the second quarter. Legal & General Group Plc now owns 159,695 shares of the financial services provider’s stock valued at $3,275,000 after buying an additional 13,712 shares during the last quarter. Institutional investors own 33.92% of the company’s stock.
About Goldman Sachs BDC
Goldman Sachs BDC, Inc is a business development company specializing in middle market and mezzanine investment in private companies. It seeks to make capital appreciation through direct originations of secured debt, senior secured debt, junior secured debt, including first lien, first lien/last-out unitranche and second lien debt, unsecured debt, including mezzanine debt and, to a lesser extent, investments in equities.
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