Zacks Investment Research downgraded shares of Hercules Technology Growth Capital, Inc. (HTGC) from OUTPERFORM to NEUTRAL on April 16, 2014, with a target price of $14.00.
We are downgrading our recommendation on Hercules Technology to Neutral due a persistent rise in operating expenses over the last few years. However, the company's fourth-quarter distributable net operating income (DNOI) surpassed the Zacks Consensus Estimate driven by improvement in interest and fee income. Moreover, the company managed to keep expenses under control during the quarter. We believe that Hercules Technology will benefit from the growing demand for venture capital investments especially in technology companies. Further, its strong capital position and enhanced capital deployment activities are expected to boost investors' confidence. Despite these positives, the sluggish economic recovery and elevated expense levels make us apprehensive.
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