On June 1, BofA adjusted its outlook on Crescent Capital BDC Inc. (NASDAQ:CCAP) and lowered its price target from $20 to $17 while maintaining a Buy rating. This revision follows the company’s Q1 2025 results, which reflected weaker-than-expected profitability.
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Still, non-accruals saw only a small uptick to 2.9%, which remains significantly below the industry’s longer-term average. BofA continues to hold a positive outlook on the business development company/BDC sector. The company’s Q1 2025 results came out on May 15, where Crescent Capital reported a net investment income of $16.6 million, which was a decrease from $20.5 million sequentially. This was attributed to lower base rates and the runoff of non-recurring income. Non-accrual loans increased to 3.5% at cost and 1.8% at fair value.
The company’s quarterly revenue totalled $42.13 million, which was also a drop of 16.35% year-over-year. However, Crescent Capital emphasizes its first-lien investment strategy as a driver for growth. In Q1, the company deployed $105 million in gross investments, with 98% directed into first-lien positions, which included 10 new platform investments totaling $78 million. This focus ensures 91% of the portfolio at fair value consists of first-lien loans, which is supported by 99% sponsor-backed companies with a 39% weighted average loan-to-value.
Crescent Capital BDC Inc. is a business development company that focuses on directly investing and specializes in the middle market.
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This article is originally published at Insider Monkey.
