$FSK

Wall Street analyst research calls on Tuesday included upgrades for Kroger (KR), Netflix (NFLX), and others, while PepsiCo (PEP), Ryder Systems (R), and more were downgraded. Futures traded higher after a rough start to the week, with major indices closing lower. Treasury yields rose, oil prices surged, and gold and crypto markets declined.

Wells Fargo downgraded FS KKR Capital to 'Underweight' from 'Equalweight' and set a price target of $10. The stock has declined 24.65% year-to-date. RBC previously adjusted its target to $13 with a 'Sector Perform' rating.

FS KKR Capital Corp. (FSK) reported Q2 2026 net investment income of $122M ($0.44/share), a net loss of $34M ($0.13/share), and NAV of $18.30/share. The company raised $150M via preferred stock and completed a $900M note issuance. Shareholders approved a share issuance proposal and elected four directors. FSK also announced a share repurchase program and a 50% fee waiver by its adviser.

FS KKR Capital Corp. (FSK) directors and executives reported multiple open-market purchases of company shares in the last 12 months, with transactions ranging from 450 to 10,000 shares at prices between $11.16 and $15.50. These purchases were made directly or indirectly through IRA accounts, increasing their holdings in the company. The filings also list other indirect holdings and follow standard disclosure procedures.

U.S. private-credit portfolio values stabilized in Q2 2026 after earlier declines, with lenders marking down software loans and reporting increased non-income-generating debt. BDCs' fair-value-to-cost ratio fell to 97.57% in Q2. Software loans saw 81% markdowns this year, with select borrowers driving losses at firms like Blue Owl, Ares, and Golub.

The article evaluates three high-yield credit vehicles: BlackRock TCP Capital (TCPC), FS KKR Capital (FSK), and Oxford Lane Capital (OXLC). TCPC reported adjusted EPS of 21 cents, NAV per share decline, and a portfolio sale. FSK beat EPS estimates, reduced leverage, and received sponsor support. OXLC offers the highest yield but with CLO equity risks. All three have seen share price declines and varying risks.

Private credit markets are showing increasing signs of distress, with non-accrual debt rising among the largest BDCs. In Q2, non-accrual debt at the top 10 BDCs increased to 3.95% of total debt, up from 3.75% in Q1. The broader BDC universe also saw a rise in non-accrual borrowers, reaching 4.69% in Q1 2026. Adjusted non-accrual rates are higher, indicating wider credit stress. Interest income at risk is climbing, potentially impacting BDC yields.

Analysts have raised their price targets for FS KKR Capital (FSK) to a range of US$11 to US$13, citing optimism around execution and balance sheet progress. RBC Capital, JPMorgan, and Truist increased targets, though maintained neutral ratings. Fair value estimate rose from US$11.50 to US$12.05, with adjusted revenue and margin assumptions.

FS KKR Capital Corp. shareholders approved a proposal to sell shares below net asset value (NAV), with 103,799,016 votes in favor. This move, approved on August 20, 2026, provides the company with more capital-raising flexibility. The approval allows FSK to issue shares below NAV, subject to conditions, which could help fund investments or repay debt but may dilute existing shareholders. The company has no immediate plans to issue shares under this authorization.

FS KKR Capital Corp (FSK) filed an SEC Form 8-K — Submission of Matters to a Vote of Security Holders. Item 5.07. Submission of Matters to a Vote of Security Holders. FS KKR Capital Corp. (the “Company”) held its Annual Meeting of Stockholders (the “Annual Meeting”) on June 18, 2026. On June 18, 2026, the Company adjourned the Annual Meeting with respect to the Share Issuance Prop