Hercules Capital upgraded to Buy at Compass Point following capital raise

As previously reported, Compass Point upgraded Hercules Capital to Buy from Neutral with a price target of $17.50, up from $17. Hercules raised $108M in fresh capital through a syndicated equity offering of 6.5M shares in early August and the “only reason to do a syndicated equity offering is that originations are accelerating faster than expected,” the analyst tells investors. The firm is increasing its estimate for Q3 and Q4 net originations, stating that these increases “will have a clear benefit to NII estimates while still keeping the leverage ratio quite manageable.”