Goldman Sachs BDC, Inc.: Near-term credit headwinds & dividend reset; Downgrade to Underperform

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Goldman Sachs BDC, Inc.: Near-term credit headwinds & dividend reset; Downgrade to Underperform

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Goldman Sachs BDC, Inc.

Near-term credit headwinds & dividend

reset; Downgrade to Underperform

Rating Change: UNDERPERFORM | PO: 8.50 USD | Price: 8.93 USD

Credit pressure likely to persist 09 July 2026

We downgrade GSBD to Underperform from Neutral due to weaker relative credit Equity

performance, reduced earnings power, and limited near-term self-help levers. GSBD’s

credit performance has generally trailed peers the last few years (Ex 2). While

Key Changesintegration with Goldman Sachs Asset Management’s private credit platform should

support better credit outcomes and profitability over time, legacy assets remain a near- (US$) Previous Current

term overhang. Pre-2022 vintages still represent 42% of the portfolio and have driven Inv. Opinion B-2-8 B-3-8

disproportionate credit stress. Non-accruals currently stand at 4.7% of the portfolio (Ex Inv. Rating NEUTRAL UNDERPERFORM

1), with 99% tied to legacy investments, versus a 3.2% average for larger BDC peers. Price Obj. 9.00 8.50

2026E DPS 1.31 1.19

Profitability and NAV/share lag peers

Credit weakness has weighed on earnings and NAV/share. GSBD’s profitability has Derek Hewett

Research Analyst

lagged peers by roughly 40–50bp over the past couple of years, while NAV/share has BofAS

declined 16% over the same period versus an 11% peer-average decline. Additionally, +1 646 855 2087 derek.hewett@bofa.com

elevated leverage also limits self-help buyback capacity; recall GSBD repurchased ~4%

of its shares in 2025 to support valuation. Given the likelihood that below-peer financial

performance persists near term, we do not believe the current valuation is justified.

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