| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 74 | 21.3x | 17.8x | Top tier | |
Growth | 63 | 32.1% | 7.1% | Around median | |
Quality | 34 | — | — | Bottom tier | |
Safety | 57 | — | — | Around median | |
Capital Return | 92 | 14.61% | 2.12% | Top tier | |
Momentum | 34 | -12.5% | 2.9% | Bottom tier | |
Sentiment | 68 | 4 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Morgan Stanley Direct Lending Fund (MSDL) is a direct lending fund that finances middle-market companies, with a defensive focus on the senior portion of the capital structure. The fund generates its income primarily from interest and returns on debt investments, in addition to the contribution from Capstone JV; as of June 30, 2026, the portfolio had a fair value of $3.6 billion, spread across 229 companies in 36 industries, with approximately 93% consisting of first-lien secured debt and 3% of investments through the joint venture. Average exposure per borrower was approximately $15.5 million, while the weighted average yield on debt and other income-producing investments was 8.8% at cost.
In fiscal Q2 2026, the financial statements reported revenue of $82.6 million, gross profit of $50.6 million, and net income of $7.9 million, equivalent to earnings per share of $0.09; this corresponds to a gross profit margin of approximately 61.3% and a net income margin of approximately 9.6%. In the call data for the same period, total investment income was $89 million, while net investment income was $38.2 million, or $0.45 per share, compared with $0.47 per share in the previous quarter. Net investment income covered the $0.45 per-share distribution, but net asset value declined to $19.50 per share from $19.81.
On a trailing twelve-month basis in 2026, revenue was $406.2 million, gross profit was $354.3 million, net income was $59.7 million, and earnings per share were $0.69. By comparison, fiscal 2025 recorded revenue of $387.0 million, net income of $122.1 million, and earnings per share of $1.40. This combination shows revenue growth on a trailing twelve-month basis, alongside a clear decline in net profitability compared with fiscal 2025.
Automated analysis for informational purposes only — not investment advice.
The average analyst price target is $15.67, within a range of $14.50 to $17.00, and even the upper end remains below the 52-week range high of $18.17, while the 52-week range low is $13.66. The “Neutral” consensus reflects a lack of broad bullish conviction, and no usable P/E ratio is available; therefore, valuation centers on the balance between net asset value of $19.50 per share as of June 30, 2026, and higher non-accruals, lower net investment income, and tight distribution coverage.
Figures in the text are as of 2026-09-02; the live price is shown at the top of the page.
MSDL generates its income primarily from interest and returns on loans to middle-market companies, with 93% of the portfolio as of June 30, 2026, concentrated in first-lien secured debt. The weighted average yield on debt and other income-producing investments was 8.8% at cost, while total investment income was $89 million in fiscal Q2 2026. Capstone JV provides another source of income and contributed approximately $0.03 to earnings per share during that quarter.
Net investment income was $0.45 per share in fiscal Q2 2026, equal to the regular distribution of $0.45 per share. The board declared a distribution of the same amount for fiscal Q3 2026, payable to shareholders of record as of September 30, 2026. Spillover income was approximately $0.86 per share, but the absence of a quarterly coverage cushion makes credit results, funding costs, and Capstone JV's growth important factors in sustaining coverage.
As of June 30, 2026, approximately 95% of the portfolio was rated 2 or better and was generally performing in line with the original underwriting assumptions. In contrast, non-accrual investments increased to 2.9% of the portfolio at cost following the addition of US Infra Services, Spectrio, and BPG Holdings. The average loan-to-value ratio was approximately 39%, while the portfolio remained diversified across 229 companies in 36 industries.
Capstone JV has maximum equity commitments of $250 million, of which MSDL has committed $200 million, and approximately 52% of the total commitments had been called as of June 30, 2026. These funds supported investment commitments of approximately $426 million across 58 companies in 25 industries. In fiscal Q2 2026, MSDL deployed an additional $10 million into the joint venture, and its contribution to earnings per share increased to approximately $0.03.
The gross debt-to-equity ratio was 1.21 times as of June 30, 2026, compared with 1.22 times in the previous period, and unsecured debt represented 56% of total funded debt. In April 2026, the fund amended and extended its institutional credit facility, then issued $350 million of five-year unsecured notes with a 6.10% coupon after quarter-end. The issuance is intended to pre-fund a portion of the February 2027 maturity, which has a face-value balance of $425 million, and the fund has effectively hedged the interest rate on the new issuance.
