Oppenheimer analyst Chris Kotowski downgraded Stellus Capital Investment Corp.'s stock rating to "perform" from "outperform" and removed the price target of $15.

The analyst noted that Stellus' second-quarter results were "marred" by a new $18 million non-accrual, Protect America, which went on late in the period.

Kotowski also wrote that while management indicated that the second-quarter results for Protect America only had a modest benefit to net investment income, it will likely be a drag on earnings going forward.

Kotowski added that Stellus' management was optimistic about another nonaccrual being favorably resolved in the near future.

The analyst's EPS estimates for Stellus are $1.70 for 2019 and $1.36 for 2020.