Ares Capital (NASDAQ:ARCC) Given New $21.00 Price Target at Truist Financial

Key Points

• Truist Financial lowered its Ares Capital price target to $21 from $22 but maintained a “buy” rating, implying approximately 13.5% upside from the $18.50 share price. Analysts overall maintain a “Moderate Buy” consensus with a $20.40 average target.
• Ares Capital’s quarterly EPS of $0.47 matched expectations, while revenue of $768 million fell slightly short of forecasts and earnings declined from the prior-year period. GAAP net income and net asset value were pressured by realized and unrealized investment losses.
• The company remains attractive to income-focused investors, supported by a roughly 10% dividend yield and a 17-year dividend streak. Institutional ownership stands at 27.38%, with several major investors increasing their stakes.

Ares Capital (NASDAQ:ARCC - Get Free Report) had its price target lowered by analysts at Truist Financial from $22.00 to $21.00 in a report released on Thursday,Benzinga reports. The firm presently has a "buy" rating on the investment management company's stock. Truist Financial's target price points to a potential upside of 13.50% from the company's current price.

Several other equities research analysts have also weighed in on the company. Weiss Ratings reissued a "hold (c)" rating on shares of Ares Capital in a research report on Tuesday, June 9th. B. Riley Financial lowered their price target on Ares Capital from $22.00 to $20.00 and set a "buy" rating for the company in a report on Wednesday, April 29th. Royal Bank Of Canada dropped 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 note on Wednesday, April 29th. Wells Fargo & Company reissued an "equal weight" rating and set a $19.00 price objective (down from $20.00) on shares of Ares Capital in a report on Friday, June 12th. Finally, JPMorgan Chase & Co. reduced their price objective on shares of Ares Capital from $19.00 to $18.50 and set an "overweight" rating for the company in a research report on Thursday, July 2nd. Eight equities research analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company's stock. According to data from MarketBeat.com, Ares Capital has a consensus rating of "Moderate Buy" and a consensus price target of $20.40.

Ares Capital Stock Down 1.1%

Ares Capital stock traded down $0.21 during midday trading on Thursday, reaching $18.50. The company's stock had a trading volume of 1,577,631 shares, compared to its average volume of 6,322,128. Ares Capital has a fifty-two week low of $17.40 and a fifty-two week high of $22.85. The company has a quick ratio of 1.40, a current ratio of 1.40 and a debt-to-equity ratio of 1.13. The company has a market cap of $13.29 billion, a P/E ratio of 11.36 and a beta of 0.56. The business has a 50-day simple moving average of $18.67 and a 200-day simple moving average of $18.92.

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 (EPS) for the quarter, hitting analysts' consensus estimates of $0.47. The company had revenue of $768.00 million during the quarter, compared to the consensus estimate of $770.19 million. Ares Capital had a return on equity of 9.85% and a net margin of 37.30%.During the same period in the previous year, the business earned $0.50 EPS. On average, research analysts expect that Ares Capital will post 1.9 earnings per share for the current fiscal year.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the company. Morgan Stanley boosted its holdings in shares of Ares Capital by 2.0% in the fourth quarter. Morgan Stanley now owns 17,558,581 shares of the investment management company's stock valued at $355,210,000 after acquiring an additional 341,578 shares during the period. UBS Group AG raised its position in Ares Capital by 41.8% in the 4th quarter. UBS Group AG now owns 11,201,905 shares of the investment management company's stock valued at $226,615,000 after purchasing an additional 3,301,890 shares during the last quarter. Strs Ohio acquired a new stake in Ares Capital during the 1st quarter worth $189,210,000. Bank of America Corp DE boosted its stake in Ares Capital by 16.0% during the 1st quarter. Bank of America Corp DE now owns 9,135,454 shares of the investment management company's stock worth $164,621,000 after purchasing an additional 1,259,230 shares during the period. Finally, Legal & General Group Plc grew its position in Ares Capital by 16.4% during the 4th quarter. Legal & General Group Plc now owns 5,408,067 shares of the investment management company's stock worth $109,432,000 after purchasing an additional 761,838 shares during the last quarter. Institutional investors and hedge funds own 27.38% of the company's stock.

Key Stories Impacting Ares Capital

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

• Positive Sentiment: Dividend remains a key support. ARCC declared a third-quarter dividend of $0.48 per share, payable September 30 to shareholders of record September 15. The roughly 10% yield and the company’s 17-year dividend streak reinforce its appeal to income-focused investors. Ares Capital dividend announcement
• Positive Sentiment: Liquidity and lending-position remain solid. Management highlighted ARCC’s scale, improving lending terms and balance-sheet flexibility despite slower transaction activity. The company had approximately $6.7 billion of available borrowing capacity and $383 million in cash at quarter-end, while new investment commitments reached about $2.6 billion. Ares Capital Q2 earnings call highlights
• Positive Sentiment: Core earnings met expectations. Second-quarter net investment income was $359 million, or $0.50 per share, while reported EPS of $0.47 matched consensus. Total investment income increased to $768 million from $745 million a year earlier. Keefe, Bruyette & Woods maintained an “outperform” rating, though it reduced its price target to $20 from $21. Ares Capital earnings report
• Neutral Sentiment: Results were broadly in line, but growth is moderating. Revenue was slightly below analyst expectations, and EPS declined from $0.50 in the year-ago quarter. Lower benchmark rates and higher funding costs could continue to pressure earnings.
• Negative Sentiment: Investment losses hurt GAAP results and NAV. GAAP net income fell to $171 million, or $0.24 per share, from $361 million, or $0.52, a year earlier, as realized and unrealized losses weighed on earnings. NAV declined to $19.35 per share from $19.94 at year-end, increasing investor concerns about credit performance during a slower transaction environment. Ares Capital investment losses report

Ares Capital Company Profile

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.

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