On Thursday, Keefe, Bruyette & Woods reiterated its Outperform rating on Golub Capital BDC (NASDAQ: GBDC), naming it as one of its top picks for 2025, pointing to an attractive valuation and potential for significant total returns.
"We continue to recommend GBDC as one of our top picks. GBDC has maintained very strong credit quality and has one of the lowest fee structures in the sector," the firm said.
The analyst at Keefe, Bruyette & Woods emphasized that Golub Capital BDC should trade at a premium to its net asset value (NAV), setting a target price at 1.08 times the price to NAV (P/NAV). This recommendation comes as GBDC has shown resilience in its trading valuation since its inception in 2010, maintaining an average P/NAV of 1.07 times and reaching 1.12 times before a dilutive rights offering in 2020.
The firm's confidence in Golub Capital BDC is bolstered by the company's recent trend of recovering its premium to NAV multiple. They believe that the current market conditions, which feature above-average valuations, present an opportunity for GBDC to offer attractive upside and total return potential to investors.
Furthermore, Keefe, Bruyette & Woods has taken a conservative stance with estimates that currently sit below the consensus on Wall Street.
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