Wells downgrades FS KKR to Underweight on fear of dividend cut

Wells Fargo analyst Finian O’Shea downgraded FS KKR Capital (FSK) to Underweight from Equal Weight with a price target of $19, down from $21. The firm sees increased likelihood of a dividend cut in 2026. While the dividend is poised to draw on FS KKR’s “outsized” spillover balance through 2025, the resulting net asset value decline and uncertainty over its 2026 payout are likely to weigh on the stock’s valuation. the analyst tells investors in a research note.