Morgan Stanley Direct Lending Fund (NYSE:MSDL) Sets New 52-Week Low - Should You Sell?

Key Points

• Shares hit a new 52-week low of $13.66 and last traded around $13.78, while analysts have trimmed targets and left a consensus Hold rating with a $15.58 price target.
• The fund declared a quarterly dividend of $0.45 (annualized $1.80), implying a 13.0% yield, but a payout ratio of 128.57% raises questions about dividend sustainability.
• Despite the weakness, insiders — including CEO Michael Jr. Occi and Jeff M. Day — bought shares in March, increasing their holdings by roughly 32.6% and 28.1%, respectively.

Shares of Morgan Stanley Direct Lending Fund (NYSE:MSDL - Get Free Report) reached a new 52-week low on Thursday . The company traded as low as $13.66 and last traded at $13.7790, with a volume of 28666 shares changing hands. The stock had previously closed at $13.82.

Analysts Set New Price Targets

MSDL has been the subject of several recent research reports. UBS Group decreased their price target on Morgan Stanley Direct Lending Fund from $18.00 to $16.00 and set a "neutral" rating for the company in a report on Friday, March 13th. Wells Fargo & Company cut their price objective on shares of Morgan Stanley Direct Lending Fund from $16.00 to $14.00 and set an "equal weight" rating on the stock in a report on Monday, March 2nd. Royal Bank Of Canada lowered their target price 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 report on Thursday, March 5th. JPMorgan Chase & Co. dropped their price target on shares of Morgan Stanley Direct Lending Fund from $16.50 to $14.00 and set a "neutral" rating on the stock in a research report on Friday, March 13th. Finally, Raymond James Financial restated an "outperform" rating and set a $17.00 price target on shares of Morgan Stanley Direct Lending Fund in a report on Thursday, March 5th. One research analyst has rated the stock with a Buy rating and six have issued a Hold rating to the company. According to data from MarketBeat.com, Morgan Stanley Direct Lending Fund currently has a consensus rating of "Hold" and a consensus price target of $15.58.

Morgan Stanley Direct Lending Fund Stock Up 0.4%

The stock has a 50-day moving average of $15.17 and a 200 day moving average of $16.29. The company has a market capitalization of $1.19 billion, a PE ratio of 9.90 and a beta of 0.34. The company has a quick ratio of 1.59, a current ratio of 1.59 and a debt-to-equity ratio of 1.19.

Morgan Stanley Direct Lending Fund (NYSE:MSDL - Get Free Report) last announced its quarterly earnings data on Thursday, February 26th. The company reported $0.49 earnings per share (EPS) for the quarter, meeting analysts' consensus estimates of $0.49. Morgan Stanley Direct Lending Fund had a return on equity of 9.88% and a net margin of 30.73%.The firm had revenue of $49.57 million during the quarter, compared to the consensus estimate of $97.30 million. Sell-side analysts anticipate 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 declared a quarterly dividend, which will be paid on Friday, April 24th. Investors of record on Tuesday, March 31st will be given a dividend of $0.45 per share. The ex-dividend date is Tuesday, March 31st. This represents a $1.80 annualized dividend and a yield of 13.0%. Morgan Stanley Direct Lending Fund's dividend payout ratio is presently 128.57%.

Insider Transactions at Morgan Stanley Direct Lending Fund

In related news, insider Jeff M. Day acquired 5,000 shares of the stock in a transaction on Thursday, March 5th. The shares were acquired at an average price of $14.89 per share, with a total value of $74,450.00. Following the completion of the transaction, the insider owned 22,818 shares in the company, valued at approximately $339,760.02. The trade was a 28.06% increase in their position. The purchase was disclosed in a legal filing with the SEC, which is accessible through this link. Also, CEO Michael Jr. Occi acquired 7,000 shares of the stock in a transaction on Monday, March 2nd. The stock was bought at an average cost of $14.87 per share, for a total transaction of $104,090.00. Following the transaction, the chief executive officer owned 28,500 shares of the company's stock, valued at approximately $423,795. This trade represents a 32.56% increase in their position. The SEC filing for this purchase provides additional information. Company insiders own 0.21% of the company's stock.

Hedge Funds Weigh In On Morgan Stanley Direct Lending Fund

Institutional investors have recently bought and sold shares of the company. Bartlett & CO. Wealth Management LLC purchased a new stake in Morgan Stanley Direct Lending Fund in the third quarter worth $30,000. NewEdge Advisors LLC bought a new position in shares of Morgan Stanley Direct Lending Fund during the 3rd quarter worth $32,000. SHP Wealth Management bought a new position in shares of Morgan Stanley Direct Lending Fund during the 4th quarter worth $39,000. DV Equities LLC purchased a new stake in Morgan Stanley Direct Lending Fund in the 4th quarter worth about $41,000. Finally, Steward Partners Investment Advisory LLC increased its holdings in Morgan Stanley Direct Lending Fund by 225.0% in the 2nd quarter. Steward Partners Investment Advisory LLC now owns 3,250 shares of the company's stock worth $61,000 after acquiring an additional 2,250 shares during the last quarter.

About Morgan Stanley Direct Lending Fund

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.

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