Blue Owl Technology Finance initiated with Buy at Truist Securities

Truist Securities has initiated coverage on Blue Owl Technology Finance (OTF), assigning it a Buy rating with a price target of $17, as shares currently trade at $15.45.

The company operates as a business development company (BDC) focused on private middle-market technology firms, particularly in the software sector, and is required to distribute at least 90% of its taxable income as dividends.

Analysts believe OTF can improve profitability through increased leverage, optimized asset yields, and scale efficiencies, with forecasts predicting an increase in net investment income per share from $1.29 in 2025 to $1.60 in 2026.

OTF benefits from strong support from its external manager, Blue Owl Capital, and has an attractive total return profile, aligning it with the average Buy recommendation from Wall Street analysts, despite some holding a Hold rating.

Recommendation Rating: Buy

Truist Securities has begun coverage on Blue Owl Technology Finance (NYSE:OTF), a technology-focused specialty finance firm, and has assigned it a Buy rating with a price target of $17. As of Monday afternoon, shares were trading at $15.45.

Blue Owl Technology Finance operates as an externally managed business development company (BDC) and is required to distribute at least 90% of its taxable income as dividends. This company distinguishes itself from other BDCs by concentrating on investments in established private middle-market technology firms, particularly in the software sector, as highlighted by analysts Arren Cyganovich and Jack Wilson.

According to their research, Truist sees potential for OTF to enhance profitability through increased leverage from its current low levels, the optimization of asset yields, and the realization of scale efficiencies in both funding and operating expenses.

Cyganovich further emphasized the company’s well-diversified portfolio, noting that its software investments span various industries. Forecasts suggest that the net investment income (NII) per share could rise from $1.29 in 2025 to $1.60 in 2026.

Other positive factors for the stock involve the support from its large external manager, Blue Owl Capital, and an appealing total return profile, as indicated in the research report.

Truist's investment rating for OTF is consistent with the average recommendation from Wall Street analysts, who also rate it as a Buy. However, other commentators maintain a Hold position on the stock.