Ares Capital (NASDAQ:ARCC) Cut to Sell at Wall Street Zen

Key Points

• Wall Street Zen downgraded Ares Capital to “sell” from “hold,” although broader analyst sentiment remains “Moderate Buy,” with eight buy ratings, three holds and a consensus price target of $20.40.
• Ares Capital’s latest quarterly results met expectations, with earnings of $0.47 per share, while revenue of $768 million was slightly below forecasts. Shares opened at $18.76, near their 50- and 200-day moving averages.
• Credit-quality concerns are increasing after five borrowers moved to non-accrual status during the quarter, including an $84.6 million AmeriVet loan; institutional investors nonetheless own 27.38% of the stock.

Ares Capital (NASDAQ:ARCC - Get Free Report) was downgraded by equities researchers at Wall Street Zen from a "hold" rating to a "sell" rating in a research report issued to clients and investors on Sunday.

Several other equities research analysts have also recently weighed in on the stock. Citizens Jmp lowered their price objective on shares of Ares Capital from $23.00 to $22.00 and set a "market outperform" rating for the company in a research report on Wednesday, April 22nd. JPMorgan Chase & Co. cut their target price on Ares Capital from $19.00 to $18.50 and set an "overweight" rating on the stock in a research note on Thursday, July 2nd. Royal Bank Of Canada reduced their price target on shares of Ares Capital from $22.00 to $21.00 and set an "outperform" rating on the stock in a research report on Wednesday, April 29th. Truist Financial decreased their price objective on Ares Capital from $22.00 to $21.00 and set a "buy" rating for the company in a research report on Thursday. Finally, Keefe, Bruyette & Woods lowered their target price on Ares Capital from $21.00 to $20.00 and set an "outperform" rating for the company in a report on Thursday. Eight research analysts have rated the stock with a Buy rating and three have given a Hold rating to the company's stock. Based on data from MarketBeat.com, Ares Capital has an average rating of "Moderate Buy" and a consensus price target of $20.40.

Ares Capital Trading Down 0.4%

ARCC stock opened at $18.76 on Friday. The business's 50 day moving average is $18.67 and its 200-day moving average is $18.91. The company has a current ratio of 1.28, a quick ratio of 1.40 and a debt-to-equity ratio of 1.14. The firm has a market cap of $13.47 billion, a P/E ratio of 13.90 and a beta of 0.56. Ares Capital has a 1-year low of $17.40 and a 1-year high of $22.85.

Ares Capital (NASDAQ:ARCC - Get Free Report) last announced its quarterly earnings results on Wednesday, July 29th. The investment management company reported $0.47 earnings per share for the quarter, meeting analysts' consensus estimates of $0.47. The firm had revenue of $768.00 million for the quarter, compared to analysts' expectations of $770.19 million. Ares Capital had a return on equity of 9.80% and a net margin of 30.91%.During the same period in the prior year, the business posted $0.50 earnings per share. Equities analysts anticipate that Ares Capital will post 1.9 earnings per share for the current fiscal year.

Institutional Trading of Ares Capital

Several hedge funds and other institutional investors have recently modified their holdings of ARCC. Accel Wealth Management grew its stake in shares of Ares Capital by 4.0% in the second quarter. Accel Wealth Management now owns 56,895 shares of the investment management company's stock valued at $1,054,000 after acquiring an additional 2,185 shares in the last quarter. Family Wealth Partners LLC raised its stake in Ares Capital by 8.4% in the 2nd quarter. Family Wealth Partners LLC now owns 35,807 shares of the investment management company's stock worth $663,000 after purchasing an additional 2,768 shares in the last quarter. Kentucky Trust Co raised its stake in Ares Capital by 4.7% in the 2nd quarter. Kentucky Trust Co now owns 18,106 shares of the investment management company's stock worth $336,000 after purchasing an additional 810 shares in the last quarter. Wealthcare Advisory Partners LLC raised its stake in Ares Capital by 14.3% in the 2nd quarter. Wealthcare Advisory Partners LLC now owns 264,044 shares of the investment management company's stock worth $4,893,000 after purchasing an additional 32,983 shares in the last quarter. Finally, Key Client Fiduciary Advisors LLC boosted its holdings in Ares Capital by 3.7% in the 2nd quarter. Key Client Fiduciary Advisors LLC now owns 67,752 shares of the investment management company's stock valued at $1,255,000 after purchasing an additional 2,388 shares during the period. Institutional investors own 27.38% of the company's stock.

Ares Capital News Summary

Here are the key news stories impacting Ares Capital this week:

• Positive Sentiment: Second-quarter earnings held up, with adjusted EPS of $0.47 matching estimates and investment income remaining resilient. Management also highlighted ARCC’s scale, improving lending terms and balance-sheet flexibility despite a slower transaction market. Ares Capital's Q2 Earnings Call Highlights Market Strength
• Positive Sentiment: ARCC declared a quarterly dividend of $0.48 per share, payable September 30 to shareholders of record September 15. The roughly 10.2% annualized yield and 17-year dividend streak support the stock’s appeal to income-focused investors. Ares Capital Just Extended Its Dividend Streak to 17 Years
• Positive Sentiment: Truist maintained a “buy” rating with a $21 price target, while Keefe, Bruyette & Woods retained an “outperform” rating with a $20 target, indicating analysts still see potential upside from current levels. Analyst Price Target Updates
• Neutral Sentiment: Broader private-credit results remained resilient, and strong fundraising across the Ares platform points to continued institutional demand. However, elevated defaults, retail redemptions and liquidity concerns remain important industry risks. Private Credit Roundup
• Negative Sentiment: Five ARCC borrowers were moved to non-accrual status during the second quarter. The largest was an $84.6 million subordinated loan to AmeriVet Veterinary Partners, raising concerns about portfolio credit quality and potential pressure on net asset value. Ares BDC Moves Five Borrowers to Non-Accrual
• Negative Sentiment: Although quarterly revenue was close to expectations, year-over-year expenses increased and unrealized losses weighed on results. Both Truist and KBW lowered their price targets, signaling a more cautious outlook even while keeping positive ratings. ARCC Stock Dips as Q2 Earnings Meet Estimates

About Ares Capital

Ares Capital Corporation NASDAQ: ARCC is a publicly traded business development company (BDC) that specializes in providing debt and equity financing solutions to U.S. middle-market companies. As a BDC, Ares Capital offers investors access to a diversified portfolio of tailored credit investments, including senior secured loans, unitranche financing, mezzanine debt and equity co-investments. The firm's flexible capital structures are designed to support companies seeking growth capital, refinancing or strategic acquisitions.

Through its credit platform, Ares Capital focuses on originations, underwriting and portfolio management across a range of industries, with a particular emphasis on sectors such as healthcare, technology, industrials and business services.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.