Sixth Street Specialty Lending Q3 adjusted EPS misses estimates

What happened

Sixth Street Specialty Lending reported Q3 adjusted earnings per share of $0.36, missing the $0.44 consensus estimate from 11 analysts. The company declared a Q4 base dividend of $0.42 per share and a Q3 supplemental dividend of $0.01 per share.

Confirmed

Global impact / market context

A miss on adjusted earnings per share means profit fell short of what analysts expected. For investors, dividends matter because they are cash payments, so the declared payouts may help offset concern about weaker quarterly profit.

Analyst inference

Analysts rate the stock a buy overall, with a median 12-month price target of $20.00, about 10.1% above its November 2 closing price of $18.17. The stock trades at 10 times next 12-month earnings.

Analyst inference

What to watch

1. Watch whether future quarterly results show adjusted earnings per share closer to the $0.44 consensus estimate that Q3 missed. Confirmed
2. Watch whether the company continues declaring both base and supplemental dividends, since the Q4 base dividend is $0.42 per share and Q3 supplemental is $0.01. Proposed
3. Watch direct originations of senior secured loans to U.S. middle-market companies, which the company said drove results, as a signal for future revenue. Analyst inference

Evidence

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