UPDATE: Deutsche Bank Initiates Coverage on Prospect Capital on Good Portfolio Position

In a report published Friday, Deutsche Bank analyst Stephen Laws initiated coverage on Prospect Capital (NASDAQ: PSEC) with a Buy rating and $12.25 price target.

In the report, Deutsche Bank noted, “We expect the portfolio to continue generating attractive ROEs with strong credit results. We believe PSEC's portfolio is well-positioned given the diversification across industries and should benefit from increasing short-term rates, as the investment portfolio is largely floating-rate and is funded with largely fixed-rate financing. We expect the company to finance future portfolio growth through its ATM program and InterNotes offerings. We are establishing a price target of $12.25 per share, which is based on shares trading at a 15% premium to NAV.”

Prospect Capital closed on Thursday at $11.22.