Clear Street Maintains Buy on GECC, Lowers Price Target to $8.50

Core Viewpoint - Great Elm Capital Corp. (NASDAQ:GECC) is facing challenges in its financial performance, particularly in Q3 2025, which has led to a revised price target from analysts while maintaining a buy rating. Financial Performance - In Q3 2025, Great Elm Capital Corp. reported net investment income (NII) of $2.4 million, or $0.20 per share, a significant decline from $5.9 million, or $0.51 per share, in Q2 2025, primarily due to the absence of a distribution from an insurance-related investment [4] - The company maintained a distribution of $0.37 per share during the third quarter and approved a $10 million share repurchase program [3] - The company raised $27 million in equity and refinanced its highest-cost debt to strengthen its balance sheet [3] Analyst Insights - Clear Street analyst Mickey Schleien lowered the price target for GECC to $8.50 from $10 while maintaining a Buy rating, citing a "rough" Q3 with multiple credit issues and expectations of lower earnings ahead, along with potential dividend pressure in 2026 [2] Investment Strategy - Great Elm Capital Corp. focuses on generating current income and capital appreciation through investments in debt and income-producing equity securities, including specialty finance businesses and collateralized loan obligations (CLOs) [5] - Management plans to deploy $25 million in cash and over $20 million from monetizing non-yielding assets into income-generating investments [4] Market Position - GECC is included among the 15 stocks with the highest dividend yields, indicating its attractiveness for income-focused investors [1]