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B. Riley upgrades Stellus Capital to Neutral amid leverage decline

B. Riley upgrades Stellus Capital to Neutral amid leverage decline

B. Riley analyst Bryce Rowe upgraded Stellus Capital to Neutral from Sell with a price target of $13.25, up from $12.50, following the Q1 report. The company’s balance sheet leverage has declined modestly since Q3 of 2023 and it has a sufficient liquidity position as well as prospects for additional realized gains, the analyst tells investors in a research note. The firm pegs Stellus Capital;s available liquidity at $127M, or 15% of the portfolio, and notes the company has the ability to raise equity via the at-the-market offering, given that it trades above net asset value.

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