Zacks Investment Research upgraded shares of Hercules Technology Growth Capital, Inc. (HTGC) from NEUTRAL to OUTPERFORM on February 05, 2014, with a target price of $16.50.
We are upgrading our long-term recommendation on Hercules to Outperform to reflect its strong liquidity position that will lead to portfolio expansion. Further, the company's third-quarter distributable net operating income (DNOI) surpassed the Zacks Consensus Estimate benefiting from considerable improvement in total investment income. However, higher interest expenses, loan fees and operating expenses acted as headwinds. Moreover, we believe that the company will benefit from the growing demand for venture capital investments. Further, Hercules' strong capital position and enhanced capital deployment activities are expected to boost investors' confidence. Despite these positives, the sluggish economic recovery and higher expenses make us apprehensive.
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