Morgan Stanley Direct Lending Fund (NYSE:MSDL) Reaches New 12-Month Low - Should You Sell?

Key Points

• Shares hit a new 52-week low of $14.25 and several brokers have trimmed targets, leaving a consensus "Hold" with an average price target of $15.58.
• Dividend and payout: the fund announced a $0.45 quarterly dividend (annualized $1.80, a 12.7% yield) but has a payout ratio of 142.86%, suggesting the distribution may be unsustainably high.
• Mixed fundamentals and insider buying: quarterly EPS met estimates at $0.49 while revenue missed materially, yet insiders including the CEO bought shares, modestly increasing their holdings.

Morgan Stanley Direct Lending Fund (NYSE:MSDL - Get Free Report) shares reached a new 52-week low during trading on Friday . The company traded as low as $14.25 and last traded at $14.25, with a volume of 47444 shares traded. The stock had previously closed at $14.43.

Wall Street Analyst Weigh In

Several brokerages recently weighed in on MSDL. UBS Group decreased their target price on Morgan Stanley Direct Lending Fund from $18.00 to $16.00 and set a "neutral" rating for the company in a research note on Friday, March 13th. Keefe, Bruyette & Woods dropped their price target on shares of Morgan Stanley Direct Lending Fund from $18.50 to $16.50 and set a "market perform" rating on the stock in a research report on Monday, March 2nd. Wells Fargo & Company cut their price target on shares of Morgan Stanley Direct Lending Fund from $16.00 to $14.00 and set an "equal weight" rating for the company in a report on Monday, March 2nd. Royal Bank Of Canada reduced their price objective on shares of Morgan Stanley Direct Lending Fund from $18.00 to $16.00 and set a "sector perform" rating for the company in a research report on Thursday, March 5th. Finally, Raymond James Financial reaffirmed an "outperform" rating and issued a $17.00 price objective on shares of Morgan Stanley Direct Lending Fund in a research note on Thursday, March 5th. One equities research analyst has rated the stock with a Buy rating and six have assigned a Hold rating to the company. According to MarketBeat.com, Morgan Stanley Direct Lending Fund currently has a consensus rating of "Hold" and an average target price of $15.58.

Morgan Stanley Direct Lending Fund Stock Down 1.5%

The stock has a fifty day moving average of $15.37 and a 200-day moving average of $16.40. The firm has a market capitalization of $1.22 billion, a price-to-earnings ratio of 10.14 and a beta of 0.34. The company has a current ratio of 45.48, a quick ratio of 45.48 and a debt-to-equity ratio of 1.19.

Morgan Stanley Direct Lending Fund (NYSE:MSDL - Get Free Report) last announced its earnings results on Thursday, February 26th. The company reported $0.49 EPS for the quarter, meeting the consensus estimate of $0.49. Morgan Stanley Direct Lending Fund had a return on equity of 9.88% and a net margin of 30.73%.The business had revenue of $49.57 million during the quarter, compared to the consensus estimate of $97.30 million. As a group, sell-side analysts expect that Morgan Stanley Direct Lending Fund will post 2.56 EPS for the current year.

Morgan Stanley Direct Lending Fund Cuts Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Friday, April 24th. Shareholders of record on Tuesday, March 31st will be issued a dividend of $0.45 per share. This represents a $1.80 annualized dividend and a yield of 12.7%. The ex-dividend date is Tuesday, March 31st. Morgan Stanley Direct Lending Fund's payout ratio is presently 142.86%.

Insider Transactions at Morgan Stanley Direct Lending Fund

In other news, insider Jeff M. Day bought 5,000 shares of the company's stock in a transaction dated Thursday, March 5th. The shares were acquired at an average cost of $14.89 per share, with a total value of $74,450.00. Following the completion of the transaction, the insider directly owned 22,818 shares in the company, valued at approximately $339,760.02. The trade was a 28.06% increase in their position. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, CEO Michael Jr. Occi purchased 7,000 shares of the business's stock in a transaction dated Monday, March 2nd. The shares were purchased at an average price of $14.87 per share, for a total transaction of $104,090.00. Following the acquisition, the chief executive officer directly owned 28,500 shares of the company's stock, valued at $423,795. This trade represents a 32.56% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. 0.21% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Morgan Stanley Direct Lending Fund

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Rockefeller Capital Management L.P. raised its stake in Morgan Stanley Direct Lending Fund by 7.1% during the 4th quarter. Rockefeller Capital Management L.P. now owns 104,768 shares of the company's stock valued at $1,727,000 after purchasing an additional 6,911 shares during the period. Osbon Capital Management LLC purchased a new stake in shares of Morgan Stanley Direct Lending Fund in the fourth quarter valued at $185,000. SHP Wealth Management acquired a new stake in shares of Morgan Stanley Direct Lending Fund in the fourth quarter worth $39,000. Virtu Financial LLC acquired a new stake in shares of Morgan Stanley Direct Lending Fund in the fourth quarter worth $523,000. Finally, Beacon Pointe Advisors LLC grew its holdings in shares of Morgan Stanley Direct Lending Fund by 100.8% during the fourth quarter. Beacon Pointe Advisors LLC now owns 47,189 shares of the company's stock valued at $778,000 after buying an additional 23,689 shares in the last quarter.

Morgan Stanley Direct Lending Fund Company Profile

Morgan Stanley Direct Lending Fund NYSE: MSDL is a closed-end management investment company that seeks to provide investors with attractive current income and the potential for capital appreciation. The fund primarily invests in senior secured loans and other debt instruments issued by middle-market companies. By focusing on floating-rate structures, it aims to offer a measure of protection against rising interest rates while generating regular cash distributions.

The fund's investment strategy centers on building a diversified portfolio of direct lending opportunities across a broad range of industries, including healthcare, business services, and industrials.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.