PSEC: Recap: Divvy Stalls

Research evidence excerpt

PSEC: Recap: Divvy Stalls

Equity Research

Price Target Change — May 11, 2026

BDC

Prospect Capital Corporation

Recap: Divvy Stalls Underweight

Price Target: $2.00

Notable Changes

Our Call $ (Jun) Current Prior % Chg

PSEC's dividend is at a more stable level, but capital structure overhangs likely continue to Price Target $2.00 $2.50 -20.0%

pressure the stock. EPS 2026 0.46 0.47 -1.2%

EPS 2027 0.35 0.42 -15.8%

NOI / share (incorporating the pref dividend) fell to $0.11, in line with our estimate Rev. (MM) 2026 633.5 655.5 -3.4%

but down from $0.14 sequentially. The go forward (monthly, starting in May) quarterly Rev. (MM) 2027 579.8 622.8 -6.9%

payout falls from $0.135 to $0.105, in-line with 7% low hurdle on NAV. Slower top-line

versus our model was offset by under-earning the income incentive fee (a 4% fee out of Ticker PSEC

20% potential). Lower-end (but always variant) control div & other income added to the

Upside/(Downside) to Target (16.8)%

headwind.

Price (05/11/2026) $2.41

52 Week Range $2.37 - 3.77

Universal Turbine ($2 million) and Valley Electric ($4) each paid dividends for the second

consecutive quarter, while R-V Industries ($8 last Q) paused with its mark-down this Q Market Cap (MM) $2,237

(-$11). There was a small amount from NMMB ($0.5) which also produced a $3 realized Enterprise Value (MM) $3,934

gain. Victor Technology became a control co, just after last Q's deterioration (marked Average Daily Value (MM) $12

down to 55). It holds roughly the same structure ($11 million 1L at S+750) plus $2 million Dividend Yield 17.5%

of equity yielding 12% PIK.

$ (Jun) Q1 Q2 Q3 Q4 FY

Echelon ($52 million) and Redstone ($29) were realized losses, exited / restructured EPS

roughly at the prior mark. NP REIT declined by ~$41 million unrealized.