Eagle Point Credit's Sell Advice Remains Firm
In the first half of 2025, Eagle Point Credit (ECC) has experienced a significant setback, with its stock price-per-share (PPS) and net asset value declining as shown in monthly charts. As of July 15, 2025, ECC is trading at approximately $7.38 per share, a 21.74% decline since December 10, 2024, when the PPS was $9.43.
The decline in ECC's PPS and net asset value does not present a favorable trend for the first half of 2025. Analyst B. Riley lowered ECC’s Q2 2025 EPS estimate from $0.26 to $0.25 and also reduced full-year 2025 earnings projections from $1.10 to $1.05 per share, indicating weaker-than-expected near-term profitability.
ECC reported realized losses between $0.05 and $0.09 per share for Q2 2025, including a $0.08 per share loss from foreign-currency hedging. These losses offset gains and weighed on net investment income. Some analysts have trimmed their price targets and ratings, such as Keefe, Bruyette & Woods, who lowered their target price from $9.00 to $7.50 and set a “market perform” rating.
Despite these near-term setbacks, the consensus of analysts remains a “Buy” rating with an average 12-month price target around $9.25, implying an upside of approximately 26% from the current price levels. This suggests expectations of stabilization in earnings and net investment income, recovery or maintenance of the net asset value (NAV) per share, and continued dividend yields near 26%, which remains attractive for income-focused investors.
However, it's important to note that the expense ratio of ECC is 9.53%, which is typically considered high and should be avoided. Moreover, the decline in PPS continues to exceed the dividends prior to any tax consideration. For qualified dividends, the federal income tax rate is between 15% and 20%, and the average state income tax rate is approximately 5%, resulting in a blended tax rate ranging between 20% and 25%.
In conclusion, ECC’s recent stock struggles come from earnings pressures, realized losses, and cautious analyst revisions. While there is a cautiously optimistic outlook for recovery and gain over the next year, investors should monitor upcoming earnings announcements and market conditions affecting collateralized loan obligations, as these will drive ECC’s future performance trends.
It's also worth mentioning that the article does not investigate other ECC securities such as ECCX, ECCW, ECCV, ECCC, ECCU, and ECC.PR.D. Other Seeking Alpha analysts have addressed some of these alternative investments.
[1] Seeking Alpha, (2025). Eagle Point Credit Company Inc. (ECC) Q2 2025 Earnings Call Transcript. [Online]. Available: https://seekingalpha.com/article/4448879-eagle-point-credit-company-inc-ecc-q2-2025-earnings-call-transcript [2] Seeking Alpha, (2025). Eagle Point Credit Company Inc. (ECC) Stock Analysis. [Online]. Available: https://seekingalpha.com/symbol/NYSE:ECC/analysis/stock_overview [3] Seeking Alpha, (2025). Eagle Point Credit Company Inc. (ECC) Price Target & Forecast. [Online]. Available: https://seekingalpha.com/symbol/NYSE:ECC/price-targets-and-forecasts [4] Seeking Alpha, (2025). Eagle Point Credit Company Inc. (ECC) Q2 2025 Earnings Results. [Online]. Available: https://seekingalpha.com/symbol/NYSE:ECC/news/3741817-eagle-point-credit-company-inc-ecc-q2-2025-earnings-results
- Investors need to keep a close eye on ECC's upcoming earnings announcements and market conditions that may impact collateralized loan obligations, as these factors could influence ECC’s future performance trends and may affect the investment Decisions.
- In the current financial landscape, the decline in ECC's stock price and net asset value, coupled with the high expense ratio and the potential taxes on dividends, might make investing in ECC less favorable when compared to other securities or investments in the stock-market, despite the consensus of analysts remaining a "Buy" rating for ECC.
