KKR Financial Holdings LLC Lowered to “Neutral” at Compass Point (KFN)
KKR Financial Holdings LLC (NYSE:KFN) was downgraded by equities researchers at Compass Point from a “buy” rating to a “neutral” rating in a research report issued on Wednesday, TheFlyOnTheWall.com reports. They currently have a $12.00 price objective on the stock. Compass Point’s price objective would suggest a potential downside of 7.48% from the stock’s previous close.
The analysts wrote, “On December 16, 2013 KFN announced they signed a definitive merger agreement with KKR (Neutral- $16.50 PT),” the report noted. “KKR will acquire KFN in an all stock transaction that values KFN shares at $13.09 (approximately $2.6B and a slight premium to yesterday’s close). KFN shareholders will receive 0.51 units of KKR for each common share of KFN. Based on KKR’s closing price at the time of the announcement, the valuation represented a multiple of 1.15x September 30, 2013 GAAP book value per share. The transaction is expected to close in 1H14. Given the benefits to KFN shareholders and KKR unit holders, we expect this transaction to close. The emergence of competing bidders seems rather unlikely given the complexity of KFN’s portfolio, comparability to a portion of KKR’s assets and the price paid. While KFN’s asset portfolio, liability structure, and revenue generation capability were impressive, it was equally complex to analyze and a transition to a simpler model would have taken several years to execute.”
KFN has been the subject of a number of other recent research reports. Analysts at Zacks upgraded shares of KKR Financial Holdings LLC from an “underperform” rating to a “neutral” rating in a research note to investors on Tuesday, December 24th. They now have a $12.50 price target on the stock. Separately, analysts at Wells Fargo & Co. downgraded shares of KKR Financial Holdings LLC from an “outperform” rating to a “market perform” rating in a research note to investors on Tuesday, December 17th. Finally, analysts at Deutsche Bank downgraded shares of KKR Financial Holdings LLC from a “buy” rating to a “hold” rating in a research note to investors on Tuesday, December 17th. They now have a $11.50 price target on the stock, down previously from $12.75. Ten equities research analysts have rated the stock with a hold rating and three have assigned a buy rating to the stock. The stock has a consensus rating of “Hold” and an average target price of $15.60.
Shares of KKR Financial Holdings LLC (NYSE:KFN) traded up 0.54% on Wednesday, hitting $12.97. 1,980,446 shares of the company’s stock traded hands. KKR Financial Holdings LLC has a one year low of $8.91 and a one year high of $12.90. The stock has a 50-day moving average of $10.67 and a 200-day moving average of $10.42. The company has a market cap of $2.648 billion and a price-to-earnings ratio of 9.17.
KKR Financial Holdings LLC (NYSE:KFN) last posted its quarterly earnings results on Wednesday, October 23rd. The company reported $0.16 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.36 by $0.20. The company had revenue of $128.70 million for the quarter. During the same quarter in the previous year, the company posted $0.61 earnings per share. The company’s revenue for the quarter was down 10.2% on a year-over-year basis.
KKR Financial Holdings LLC is a specialty finance company with focus in a range of asset classes. The Company invests in financial assets consisting primarily of below investment grade corporate debt, including senior secured and unsecured loans, mezzanine loans, high yield corporate bonds, distressed and stressed debt securities, marketable and non-marketable equity securities and credit default and total rate of return swaps.
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