CGBD - TCG BDC gets Perform rating at Oppenheimer with fair value of $15

Oppenheimer analyst Mitchel Penn starts coverage of TCG BDC (CGBD +0.8%) with a Perform rating, based on estimated fair value of $15 per share. The business development company's shares recently traded at $13.82. Penn estimates TCG BDC (NASDAQ:CGBD) will earn $2.51 per share in 2021, $1.54 in 2022, and $1.56 in 20203, equating to ROEs of 16.3%, 9.2% and 9.1%, respectively. "We estimate that CGBD can earn an 8.6% ROE and, given an estimated cost of equity capital of 9.5%, we calculate a fair value of $15/share, or 0.9x book value," Penn writes in a note to clients. The company focuses on lending to U.S. middle market companies supported by financial sponsors and supplements its core strategy with complementary specialty lending and opportunistic investing strategies that utilize the capabilities of Carlyle's (NASDAQ:CG) Global Credit platform. Penn sees CGBD's relationship with Carlyle (CG) as a benefit, however two off-balance sheet credit

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TCG BDC gets Perform rating at Oppenheimer with fair value of $15