Zacks Investment Research upgraded shares of American Capital, Ltd. (ACAS) from NEUTRAL to OUTPERFORM on March 19, 2013, with a target price of $16.50.
We are upgrading our recommendation to Outperform from Neutral on American Capital reflecting the company's new investments and reduction of debt. The company's fourth-quarter 2012 operating earnings marginally beat the Zacks Consensus Estimate. The favorable outcome was attributable to top-line growth, followed by decreased operating expenses reflecting better expense management. Moreover, new investments and reduction of debt acted as tailwinds. We believe the company's healthy capital deployment activity will enhance investors' confidence in the stock. Though the improved portfolio performance is expected to continue with economic recovery, we believe that the low interest rate environment and global cues remain a headwind.
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