Morgan Stanley Direct Lending Fund (NYSE:MSDL) Reaches New 1-Year Low - Here's Why

Key Points

• Morgan Stanley Direct Lending Fund fell to a new 52-week low of $13.66, below its prior close of $14.27, with the stock trading beneath both its 50-day and 200-day moving averages.
• Analysts remain cautious: one rates MSDL a Buy and six rate it Hold, producing a consensus Hold rating and a $15.50 price target. JPMorgan raised its target to $14.50, while UBS lowered its target to $15.50.
• The company met quarterly earnings expectations with EPS of $0.45, while revenue of $88.77 million slightly missed estimates. MSDL declared a $0.45 quarterly dividend, equivalent to a 13.2% annualized yield, though its payout ratio is high at 260.87%.

Morgan Stanley Direct Lending Fund (NYSE:MSDL - Get Free Report)'s stock price hit a new 52-week low during trading on Wednesday. The company traded as low as $13.66 and last traded at $13.6450, with a volume of 209692 shares changing hands. The stock had previously closed at $14.27.

Analysts Set New Price Targets

Several equities research analysts have recently issued reports on the stock. JPMorgan Chase & Co. lifted their price objective on shares of Morgan Stanley Direct Lending Fund from $14.00 to $14.50 and gave the stock a "neutral" rating in a research report on Thursday, July 2nd. UBS Group dropped their target price on Morgan Stanley Direct Lending Fund from $16.25 to $15.50 and set a "neutral" rating on the stock in a report on Tuesday, September 1st. One equities research analyst has rated the stock with a Buy rating and six have assigned a Hold rating to the company's stock. According to data from MarketBeat, Morgan Stanley Direct Lending Fund has a consensus rating of "Hold" and a consensus price target of $15.50.

Morgan Stanley Direct Lending Fund Price Performance

The stock has a market capitalization of $1.15 billion, a price-to-earnings ratio of 19.78 and a beta of 0.54. The company has a current ratio of 1.71, a quick ratio of 1.71 and a debt-to-equity ratio of 1.20. The company's 50 day moving average is $15.04 and its 200 day moving average is $15.06.

Morgan Stanley Direct Lending Fund (NYSE:MSDL - Get Free Report) last released its quarterly earnings data on Thursday, August 6th. The company reported $0.45 earnings per share (EPS) for the quarter, meeting the consensus estimate of $0.45. The company had revenue of $88.77 million during the quarter, compared to the consensus estimate of $89.99 million. Morgan Stanley Direct Lending Fund had a net margin of 15.97% and a return on equity of 9.61%. Research analysts anticipate that Morgan Stanley Direct Lending Fund will post 1.82 EPS for the current fiscal year.

Morgan Stanley Direct Lending Fund Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Friday, October 23rd. Investors of record on Wednesday, September 30th will be given a $0.45 dividend. The ex-dividend date of this dividend is Wednesday, September 30th. This represents a $1.80 dividend on an annualized basis and a dividend yield of 13.2%. Morgan Stanley Direct Lending Fund's dividend payout ratio is 260.87%.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in MSDL. Engineers Gate Manager LP lifted its stake in Morgan Stanley Direct Lending Fund by 145.0% in the second quarter. Engineers Gate Manager LP now owns 46,340 shares of the company's stock valued at $701,000 after buying an additional 27,425 shares during the last quarter. Integrated Wealth Concepts LLC acquired a new position in shares of Morgan Stanley Direct Lending Fund in the 2nd quarter valued at $178,000. Caz Investments LP acquired a new position in shares of Morgan Stanley Direct Lending Fund in the 2nd quarter valued at $6,040,000. Ameritas Advisory Services LLC purchased a new stake in Morgan Stanley Direct Lending Fund in the 2nd quarter valued at $51,000. Finally, LM Advisors LLC purchased a new stake in Morgan Stanley Direct Lending Fund in the 2nd quarter valued at $1,310,000.

Morgan Stanley Direct Lending Fund Company Profile

Morgan Stanley Direct Lending Fund NYSE: MSDL is a business development company focused on providing financing to middle-market companies. The fund seeks to generate current income and, to a lesser extent, capital appreciation by investing primarily in privately negotiated senior secured loans and other debt investments.

MSDL generally targets established businesses across a range of industries and may make investments in companies backed by private equity sponsors as well as in non-sponsored businesses.

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