Sixth Street Specialty Lending (NYSE:TSLX) Shares Gap Down - Here's Why

Key Points

• TSLX shares gapped down from $17.58 to an opening price of $16.98, later trading near $16.77.
• Analyst sentiment remains generally positive, with five Buy ratings and three Holds, an overall “Moderate Buy” consensus, and an average price target of $19.83.
• The company exceeded quarterly earnings and revenue estimates, while maintaining a quarterly dividend of $0.42 per share—equivalent to a 10.0% annualized yield.

Sixth Street Specialty Lending, Inc. (NYSE:TSLX - Get Free Report) shares gapped down prior to trading on Monday. The stock had previously closed at $17.58, but opened at $16.98. Sixth Street Specialty Lending shares last traded at $16.7650, with a volume of 17,364 shares trading hands.

Analysts Set New Price Targets

Several equities research analysts recently weighed in on the company. Wall Street Zen raised Sixth Street Specialty Lending from a "sell" rating to a "hold" rating in a research note on Saturday, August 8th. Keefe, Bruyette & Woods raised their price objective on Sixth Street Specialty Lending from $18.50 to $19.50 and gave the company an "outperform" rating in a research report on Monday, August 10th. Weiss Ratings cut shares of Sixth Street Specialty Lending from a "hold (c)" rating to a "hold (c-)" rating in a report on Thursday, October 8th. JPMorgan Chase & Co. dropped their target price on shares of Sixth Street Specialty Lending from $17.50 to $16.50 and set a "neutral" rating on the stock in a report on Thursday, July 2nd. Finally, Zacks Research raised shares of Sixth Street Specialty Lending from a "strong sell" rating to a "hold" rating in a research report on Tuesday, July 7th. Five research analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average target price of $19.83.

Sixth Street Specialty Lending Price Performance

The company has a current ratio of 9.83, a quick ratio of 9.83 and a debt-to-equity ratio of 1.24. The company has a market cap of $1.59 billion, a PE ratio of 17.61 and a beta of 0.62. The firm has a 50 day moving average of $18.18 and a two-hundred day moving average of $17.84.

Sixth Street Specialty Lending (NYSE:TSLX - Get Free Report) last posted its quarterly earnings data on Tuesday, August 4th. The financial services provider reported $0.43 earnings per share for the quarter, beating analysts' consensus estimates of $0.42 by $0.01. Sixth Street Specialty Lending had a return on equity of 11.33% and a net margin of 21.79%. The company had revenue of $97.84 million during the quarter, compared to analyst estimates of $95.28 million. During the same quarter last year, the company earned $0.56 EPS. Research analysts predict that Sixth Street Specialty Lending, Inc. will post 1.74 earnings per share for the current fiscal year.

Sixth Street Specialty Lending Announces Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, September 30th. Stockholders of record on Tuesday, September 15th were issued a dividend of $0.42 per share. The ex-dividend date was Tuesday, September 15th. This represents a $1.68 annualized dividend and a dividend yield of 10.0%. Sixth Street Specialty Lending's dividend payout ratio (DPR) is presently 176.84%.

Hedge Funds Weigh In On Sixth Street Specialty Lending

Several large investors have recently modified their holdings of TSLX. Burk Holdings LLC bought a new stake in Sixth Street Specialty Lending in the 2nd quarter worth about $51,000. Fifth Third Bancorp purchased a new position in Sixth Street Specialty Lending in the 1st quarter worth about $63,000. Frazier Financial Advisors LLC purchased a new position in Sixth Street Specialty Lending in the 2nd quarter worth about $83,000. Northwestern Mutual Wealth Management Co. bought a new position in Sixth Street Specialty Lending during the 2nd quarter valued at about $96,000. Finally, North Star Investment Management Corp. bought a new position in Sixth Street Specialty Lending during the 1st quarter valued at about $111,000. Hedge funds and other institutional investors own 70.25% of the company's stock.

About Sixth Street Specialty Lending

Sixth Street Specialty Lending, Inc NYSE: TSLX is a business development company (BDC) that provides financing to established middle-market companies. The company primarily invests in privately originated debt, including first-lien senior secured loans, second-lien loans, subordinated debt and other credit investments. It may also make select equity investments in connection with its lending activities.

Sixth Street Specialty Lending generally focuses on companies with experienced management teams, strong market positions and established operating histories.

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