FS KKR Capital Corp. (NYSE:FSK) Given Consensus Rating of "Reduce" by Analysts

Key Points

• Analyst sentiment is weak: FS KKR Capital has a consensus rating of “Reduce” from eight covering brokerages, with one sell and seven hold ratings. The average price target is about $10.58.
• Latest earnings missed expectations: The company reported $0.41 EPS versus the $0.44 estimate and revenue of $304 million versus the expected $316.81 million. Revenue fell 24% year over year from the same quarter last year.
• High dividend yield, but legal risk remains: FS KKR Capital declared a quarterly dividend of $0.42, implying a 15.2% annualized yield. The stock is also facing multiple securities class action reminders and a filed lawsuit, adding to investor concerns.

FS KKR Capital Corp. (NYSE:FSK - Get Free Report) has earned an average recommendation of "Reduce" from the eight brokerages that are currently covering the stock, Marketbeat Ratings reports. One investment analyst has rated the stock with a sell recommendation and seven have assigned a hold recommendation to the company. The average twelve-month price target among brokers that have issued ratings on the stock in the last year is $10.5833.

Several analysts recently weighed in on the stock. JPMorgan Chase & Co. cut their price target on shares of FS KKR Capital from $13.00 to $9.50 and set a "neutral" rating on the stock in a report on Friday, March 13th. Weiss Ratings restated a "sell (d+)" rating on shares of FS KKR Capital in a research note on Tuesday, June 2nd. Wall Street Zen cut FS KKR Capital from a "hold" rating to a "sell" rating in a research note on Saturday, February 28th. Zacks Research upgraded FS KKR Capital from a "strong sell" rating to a "hold" rating in a research note on Monday, May 4th. Finally, Royal Bank Of Canada restated a "sector perform" rating and issued a $11.00 target price on shares of FS KKR Capital in a research note on Tuesday, May 12th.

FS KKR Capital Stock Performance

NYSE:FSK opened at $11.05 on Friday. The stock has a market cap of $3.09 billion, a P/E ratio of -5.61 and a beta of 0.83. The firm's fifty day simple moving average is $10.82 and its 200 day simple moving average is $12.48. FS KKR Capital has a twelve month low of $9.72 and a twelve month high of $22.68. The company has a quick ratio of 2.00, a current ratio of 2.00 and a debt-to-equity ratio of 1.38.

FS KKR Capital (NYSE:FSK - Get Free Report) last released its quarterly earnings results on Monday, May 11th. The company reported $0.41 earnings per share for the quarter, missing the consensus estimate of $0.44 by ($0.03). The company had revenue of $304.00 million during the quarter, compared to the consensus estimate of $316.81 million. FS KKR Capital had a negative net margin of 38.65% and a positive return on equity of 4.34%. The business's revenue was down 24.0% on a year-over-year basis. During the same quarter last year, the firm earned $0.65 EPS. As a group, research analysts predict that FS KKR Capital will post 1.66 EPS for the current year.

FS KKR Capital Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, July 2nd. Stockholders of record on Wednesday, June 17th will be paid a $0.42 dividend. This represents a $1.68 dividend on an annualized basis and a dividend yield of 15.2%. The ex-dividend date is Wednesday, June 17th. FS KKR Capital's dividend payout ratio (DPR) is presently -91.37%.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently made changes to their positions in FSK. Northwestern Mutual Wealth Management Co. lifted its stake in shares of FS KKR Capital by 55,074.7% in the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 7,741,004 shares of the company's stock valued at $114,644,000 after purchasing an additional 7,726,974 shares during the period. Saba Capital Management L.P. bought a new position in shares of FS KKR Capital during the first quarter valued at approximately $35,729,000. Oak Hill Advisors LP bought a new position in shares of FS KKR Capital during the fourth quarter valued at approximately $38,659,000. Rivernorth Capital Management LLC increased its stake in shares of FS KKR Capital by 580.7% during the first quarter. Rivernorth Capital Management LLC now owns 2,097,170 shares of the company's stock valued at $21,349,000 after purchasing an additional 1,789,090 shares in the last quarter. Finally, Balyasny Asset Management L.P. bought a new position in shares of FS KKR Capital during the third quarter valued at approximately $21,917,000. Hedge funds and other institutional investors own 36.26% of the company's stock.

More FS KKR Capital News

Here are the key news stories impacting FS KKR Capital this week:

• Negative Sentiment: Multiple law firms, including Frank R. Cruz, Rosen, Faruqi & Faruqi, Glancy Prongay Wolke & Rotter, and others, issued reminders about a pending securities class action against FS KKR Capital and the approaching lead-plaintiff deadlines, keeping legal risk in focus for shareholders. Article Title
• Negative Sentiment: Bronstein, Gewirtz & Grossman said a class action lawsuit has been filed against FS KKR Capital and certain officers, alleging violations of federal securities laws for investors who bought shares during the class period. Article Title
• Neutral Sentiment: Several firms, including Kirby McInerney and The Gross Law Firm, are simply reminding investors of deadline dates and inviting affected shareholders to seek lead-plaintiff status; this adds noise but does not, by itself, change the underlying business outlook. Article Title

About FS KKR Capital

FS KKR Capital Corp NYSE: FSK is a closed-end, externally managed business development company that primarily invests in private middle-market U.S. companies. The firm seeks to generate current income and capital appreciation by structuring investments in floating-rate senior secured loans, unitranche financings, second lien debt and mezzanine instruments. As a business development company, FSK provides financing solutions designed to support growth initiatives, acquisitions, leveraged buyouts and recapitalizations for privately held enterprises.

Established in 2018 through a strategic partnership between FS Investment Corporation and KKR Credit Advisors, a division of global investment firm KKR & Co Inc, FSK combines the credit underwriting capabilities of KKR’s global platform with FS’s expertise in private credit markets.

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