Oppenheimer Starts Sound Point Meridian Capital (SPMC) at Outperform

Oppenheimer analyst Penn Mitchel initiates coverage on Sound Point Meridian Capital (NYSE: SPMC) with a Outperform rating and a price target of $21.00.

The analyst commented: "SPMC is an externally managed, closed-end investment management company that invests in collateralized loan obligations (CLO) equity and, to a lesser extent, CLO mezzanine tranches. Its primary objective is to generate high current income. We estimate SPMC will earn $1.11/share, $2.52/share, and $2.54/share in 2024, 2025, and 2026, respectively, equating to ROEs of 11.2%, 12.8%, and 13.1%. We are assuming SPMC pays out what it earns until a formal dividend policy is enacted. We estimate that it can earn a 12.4% ROE and, given an estimated cost of equity capital of 12%, we calculate a fair value of $20.65/share, or 1.03x book value. With the stock trading around $20, we are initiating coverage of this June 2024 IPO with a $21 price target and an Outperform rating."

For an analyst ratings summary and ratings history on Sound Point Meridian Capital click here. For more ratings news on Sound Point Meridian Capital click here.

Shares of Sound Point Meridian Capital closed at $20.04 yesterday.

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