Keefe Bruyette & Woods analyst Ryan Lynch has downgraded Triangle Capital Corp. to "market perform" from "outperform," writing that the pressure on earnings and book value from credit losses has not let up.

The business development company has struggled with credit issues for three years, Lynch wrote. When the company appointed E. Ashton Poole to CEO in 2016, it embarked on a new investment strategy that lowered operating income but was also expected to improve credit quality.

That result has yet to appear and could take "several years" to complete, the analyst wrote. The majority of the company's portfolio was originated under the previous, riskier strategy.

"Credit issues from the legacy portfolio continue to arise which have pressured book value and earnings," Lynch wrote. "The market no longer rewards the stock with the significant premium valuation to the group it once had."

The analyst lowered his price target for the company to $18.00 from $20.50 per share. He lowered EPS estimates to $1.67 from $1.70 for 2017 and to $1.80 from $1.87 for 2018.