Oaktree Specialty Lending downgraded at JMP with fundamentals yet to stabilize

JMP Securities analyst Brian McKenna downgraded Oaktree Specialty Lending (OCSL) to Market Perform from Outperform with no price target after the company reported fiscal Q4 earnings, including 55c per share of adjusted NII and 45c of GAAP EPS. Net asset value, or NAV, ended the quarter at $18.09 per share, which has declined nearly 20% since the peak in Q1 of FY22, primarily driven by significant unrealized/realized losses across the portfolio totaling about $4.50 per share over this time as well as minimal cushion on the quarterly dividend more recently, the analyst noted. The firm does not view this dynamic positively, and similar to other trends across the business, continues to wait for a stabilization in the trajectory of NAV.