HRZN - Compass Point cuts Horizon Technology Finance to sell trims PT

2023-08-04 14:44:25 ET

Compass Point downgraded Horizon Technology Finance ( NASDAQ: HRZN ) to "Sell" from a previous investment rating of "Neutral," citing a streak of declining NAV for the company.

The ratings agency also trimmed its price target to $11 from $11.75.

The company on Tuesday reported net investment income per share of $0.54 and NAV per share of $11.07.

"We value HRZN at 1.00x our 4-quarter forward projection of NAV, after discounting that projection by deducting 50% of the value of loans in Categories 1&2 to account for potential future credit losses," Compass Point analyst Casey Alexander said.

"We apply our 1.00x P/NAV multiple to our 4-quarter forward estimate of NAV of $11.40, and we then reduce that by 50% of the value of the loans in credit categories 1&2," Alexander added.

Compass Point also noted that while HRZN has several portfolio companies suffering some form of distress, it has reached a point where it could see a positive outcome from Evelo Biosciences.

Shares of the company fell as much as 7.2% in the current trading session. The stock has gained 6% so far this year but has fallen 8% in the last 12 months.

Quant has rated HRZN a "Strong Buy," Wall Street a "Hold," and SA Authors a "Buy"

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