Nuveen Churchill Direct Lending (NYSE:NCDL) Issues Earnings Results

Nuveen Churchill Direct Lending (NYSE:NCDL) released its earnings results on Tuesday. The company reported $0.38 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.39 by ($0.01), Zacks reports. The business had revenue of $43.67 million for the quarter, compared to analyst estimates of $43.72 million. Nuveen Churchill Direct Lending had a return on equity of 9.60% and a net margin of 24.44%.

Here are the key takeaways from Nuveen Churchill Direct Lending’s conference call:

• Adjusted net investment income of $0.39 per share exceeded the regular $0.36 distribution, and the board declared a $0.38 per-share fourth-quarter payout, including a $0.02 supplemental distribution.
• Investment activity rebounded sharply, with $213.3 million of gross originations, while the new joint venture generated a 13.6% annualized return and is expected to ramp toward approximately $300 million of investments over the coming quarters.
• Portfolio credit metrics remained broadly stable, with 5.2x net leverage, 2.3x interest coverage, and non-accruals at 1.5% of fair value; however, the watch list increased to 11.6% from 10.8%.
• Net asset value declined modestly to $17.13 per share from $17.19, while third-quarter GAAP net income included $0.06 per share of net realized and unrealized losses, primarily from restructuring two underperforming debt positions.
• NCDL reduced gross leverage to 1.23x debt-to-equity, completed a $100 million unsecured-notes tap, and began repurchasing shares under its $50 million program at an average price of about $10.76, which management characterized as a meaningful discount to NAV.

Nuveen Churchill Direct Lending Trading Up 2.4%

Shares of NCDL stock traded up $0.28 during mid-day trading on Wednesday, reaching $12.19. The stock had a trading volume of 218,633 shares, compared to its average volume of 232,896. Nuveen Churchill Direct Lending has a 12-month low of $10.31 and a 12-month high of $15.07. The company has a market cap of $602.06 million, a P/E ratio of 12.82 and a beta of 0.55. The business has a 50-day simple moving average of $11.51 and a 200 day simple moving average of $12.73.

Nuveen Churchill Direct Lending Cuts Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, January 28th. Investors of record on Thursday, December 31st will be issued a $0.02 dividend. The ex-dividend date is Thursday, December 31st. This represents a $0.08 dividend on an annualized basis and a dividend yield of 0.7%. This is a decrease from Nuveen Churchill Direct Lending’s previous quarterly dividend of $0.36. Nuveen Churchill Direct Lending’s payout ratio is currently 151.58%.

Wall Street Analysts Forecast Growth

A number of brokerages recently issued reports on NCDL. Wells Fargo & Company reaffirmed an “underweight” rating and issued a $11.00 price target on shares of Nuveen Churchill Direct Lending in a report on Wednesday. Wall Street Zen raised shares of Nuveen Churchill Direct Lending from a “sell” rating to a “hold” rating in a report on Saturday, July 25th. Keefe, Bruyette & Woods reduced their price objective on shares of Nuveen Churchill Direct Lending from $13.50 to $13.00 and set a “market perform” rating for the company in a research report on Wednesday. Zacks Research upgraded shares of Nuveen Churchill Direct Lending from a “strong sell” rating to a “hold” rating in a report on Tuesday, July 21st. Finally, UBS Group raised shares of Nuveen Churchill Direct Lending from a “neutral” rating to a “buy” rating and dropped their target price for the company from $14.75 to $13.00 in a research report on Tuesday, September 1st. Two equities research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of “Hold” and an average price target of $13.25.

Key Stories Impacting Nuveen Churchill Direct Lending

Here are the key news stories impacting Nuveen Churchill Direct Lending this week:

• Positive Sentiment: NCDL plans to grow its joint venture to about $300 million over the coming quarters, potentially creating room for additional investment and income generation. Article
• Neutral Sentiment: Dividend reports conflict: one says NCDL declared a $0.36-per-share distribution plus a $0.02 supplemental payment, while another describes a $0.02 quarterly dividend and a 94.4% decline from $0.36. Investors may want to check the company’s announcement for the confirmed distribution details. Article
• Negative Sentiment: Third-quarter earnings were slightly below expectations: EPS was $0.38 versus a $0.39 consensus, and revenue was $43.67 million versus $43.72 million expected. The modest miss could pressure the shares, although the gaps were small. Article
• Negative Sentiment: Keefe, Bruyette & Woods cut its price target from $13.50 to $13.00 and maintained a “market perform” rating. The revised target still implies 7.1% upside from the cited $12.14 share price, but the reduction is a cautious signal. Article

About Nuveen Churchill Direct Lending

Nuveen Churchill Direct Lending Corp. (NYSE: NCDL) is a closed-end investment company that has elected to be regulated as a business development company. The company provides financing to privately owned, primarily U.S.-based middle-market businesses.

NCDL invests mainly in senior secured loans and other debt investments, with a focus on companies that may have limited access to traditional bank financing. Its portfolio may also include unitranche loans, subordinated debt and, to a lesser extent, equity or equity-related investments.