UBS upgrades Morgan Stanley Direct Lending Fund (NYSE: MSDL) from Neutral to Buy

Font: Financial Modeling Prep  • Nov 10, 2026

• UBS upgraded Morgan Stanley Direct Lending Fund (MSDL) from Neutral to Buy.
• MSDL reported strong third-quarter 2026 net investment income and beat earnings estimates.
• Despite positive financial news, credit concerns persist, with net asset value falling and shares trading at a significant discount.

UBS upgrades Morgan Stanley Direct Lending Fund (NYSE: MSDL) from Neutral to Buy. The direct lending fund’s stock is priced at $13.96 when the upgrade is posted. It is up $0.34, or 2.50%, and trades between $13.71 and $14.00 during the day.

The upgrade comes as MSDL reports third-quarter 2026 net investment income of $40.3 million, or $0.48 per share, up from $38.2 million, or $0.45 per share, in the previous quarter. Quarterly earnings of $0.48 per share beat the $0.44 Zacks Consensus Estimate, as reported by Zacks Investment Research.

MSDL declares a fourth-quarter regular dividend of $0.45 per share and a supplemental dividend of $0.015 per share. It also announces cuts to its base management and incentive fees, as reported by Business Wire. Advisory fee cuts planned for 2027 are expected to raise net investment income and narrow the gap between earnings and the dividend, as highlighted by Seeking Alpha.

Credit concerns remain. MSDL’s net asset value—the value of its assets minus liabilities—falls 3.8% to $18.76 per share, driven by a major restructuring and rising non-accruals, which reach 3.4% of cost. Its shares trade at a 27% discount to net asset value, indicating that the market expects further credit losses.