Citizens Trims TSLX Target, Calls Q1 a Turning Point

Sixth Street Specialty Lending, Inc. (NYSE:TSLX) is included among the 10 Best BDC Stocks to Buy Right Now.

On April 22, Citizens analyst Brian McKenna lowered the firm’s price recommendation on Sixth Street Specialty Lending, Inc. (NYSE:TSLX) to $24 from $25. It reiterated an Outperform rating on the shares. He described Q1 as a pivotal period for private capital. In his view, attention is shifting back to underlying fundamentals, even with recent volatility and concerns around non-traded BDC flows. He noted that valuation multiples are sitting at multi-cycle lows, while fundamentals continue to hold up. He pointed to strength in institutional fundraising, deployment, and monetization. As that gap between perception and actual performance narrows, he expects valuations to recover.

During the Q4 2025 earnings call, CEO Robert Stanley reported adjusted net investment income of $0.52 per share and adjusted net income of $0.30 per share. He said this equated to an annualized operating return on equity of 12% and a net income ROE of 7%.

He also noted that adjusted net investment income exceeded the base dividend of $0.46 per share, implying dividend coverage of about 113%.

Sixth Street Specialty Lending, Inc. (NYSE:TSLX) operates as a specialty finance company focused on lending to middle-market businesses. It aims to generate current income mainly through direct originations of senior secured loans to U.S.-based companies, along with selective investments in mezzanine loans, corporate bonds, equity securities, and other instruments.

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