Ares Capital (NASDAQ:ARCC) Price Target Lowered to $22.00 at Truist Financial

Key Points

• Truist cut its price target on Ares Capital to $22 (from $23) but maintained a buy rating, and analysts' consensus remains a "Moderate Buy" with an average target of $21.11—implying notable upside from the current ~$18.7 share price.
• Ares missed Q1 estimates with EPS of $0.47 versus $0.48 and revenue of $763M versus ~$779M, while GAAP income fell on markdowns despite a boost from a noncash accounting gain, highlighting mark-to-market volatility that could pressure distributable earnings.
• The board reaffirmed the quarterly $0.48 dividend (≈10% yield) and management cited a $1.8B backlog for revenue visibility, while insider purchases by the CEO and CFO add a signal of executive confidence.

Ares Capital (NASDAQ:ARCC - Get Free Report) had its target price dropped by equities research analysts at Truist Financial from $23.00 to $22.00 in a research report issued on Wednesday,Benzinga reports. The firm presently has a "buy" rating on the investment management company's stock. Truist Financial's price objective would indicate a potential upside of 17.71% from the stock's current price.

Other equities research analysts also recently issued reports about the company. Citizens Jmp decreased their price objective on Ares Capital from $23.00 to $22.00 and set a "market outperform" rating for the company in a report on Wednesday, April 22nd. Wells Fargo & Company reduced their price target on shares of Ares Capital from $21.00 to $20.00 and set an "overweight" rating for the company in a research report on Thursday, February 5th. B. Riley Financial reissued a "buy" rating on shares of Ares Capital in a research report on Monday, February 9th. Royal Bank Of Canada dropped their price objective on shares of Ares Capital from $23.00 to $22.00 and set an "outperform" rating on the stock in a research note on Monday, February 9th. Finally, Wall Street Zen cut shares of Ares Capital from a "hold" rating to a "sell" rating in a report on Saturday, February 7th. Eight analysts have rated the stock with a Buy rating and two have given a Hold rating to the company's stock. According to MarketBeat, Ares Capital presently has an average rating of "Moderate Buy" and an average price target of $21.11.

Ares Capital Stock Down 1.2%

ARCC opened at $18.69 on Wednesday. Ares Capital has a one year low of $17.40 and a one year high of $23.42. The company has a debt-to-equity ratio of 1.12, a quick ratio of 1.70 and a current ratio of 1.70. The stock has a market capitalization of $13.42 billion, a P/E ratio of 10.05 and a beta of 0.58. The business's 50-day simple moving average is $18.52 and its 200-day simple moving average is $19.61.

Ares Capital (NASDAQ:ARCC - Get Free Report) last announced its earnings results on Tuesday, April 28th. The investment management company reported $0.47 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.48 by ($0.01). The firm had revenue of $763.00 million during the quarter, compared to analyst estimates of $779.10 million. Ares Capital had a net margin of 42.56% and a return on equity of 9.89%. The firm's revenue for the quarter was up 4.2% compared to the same quarter last year. During the same period last year, the company earned $0.50 earnings per share. Analysts anticipate that Ares Capital will post 1.93 EPS for the current year.

Insider Activity

In other news, CEO Michael Kort Schnabel purchased 12,500 shares of the company's stock in a transaction dated Thursday, February 5th. The shares were acquired at an average cost of $19.13 per share, for a total transaction of $239,125.00. Following the completion of the purchase, the chief executive officer directly owned 40,500 shares in the company, valued at $774,765. The trade was a 44.64% increase in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CFO Scott C. Lem bought 5,186 shares of the business's stock in a transaction dated Friday, February 6th. The shares were acquired at an average cost of $19.29 per share, with a total value of $100,037.94. Following the completion of the purchase, the chief financial officer owned 39,463 shares in the company, valued at approximately $761,241.27. This represents a 15.13% increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. 0.49% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of ARCC. AQR Capital Management LLC increased its holdings in Ares Capital by 6.5% in the first quarter. AQR Capital Management LLC now owns 16,502 shares of the investment management company's stock valued at $365,000 after buying an additional 1,000 shares in the last quarter. Dynamic Technology Lab Private Ltd purchased a new stake in shares of Ares Capital during the 1st quarter worth approximately $273,000. Goldman Sachs Group Inc. grew its holdings in shares of Ares Capital by 14.5% in the 1st quarter. Goldman Sachs Group Inc. now owns 2,835,007 shares of the investment management company's stock worth $62,824,000 after acquiring an additional 358,829 shares during the period. Empowered Funds LLC increased its stake in Ares Capital by 139.9% in the 1st quarter. Empowered Funds LLC now owns 27,655 shares of the investment management company's stock valued at $613,000 after purchasing an additional 16,128 shares in the last quarter. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC acquired a new position in Ares Capital during the first quarter worth $14,766,000. Hedge funds and other institutional investors own 27.38% of the company's stock.

Key Ares Capital News

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

• Positive Sentiment: Board reaffirmed the dividend at $0.48 quarterly (≈10% yield) — supports income-focused investors and reduces near-term distribution risk. Business Wire: Press Release
• Positive Sentiment: Management flagged a $1.8B backlog and said the year is off to a strong start — pipeline/backlog gives revenue visibility and supports future investment income. MSN: Backlog & Dividend Coverage
• Positive Sentiment: Net investment income rose after a noncash accounting gain (NII $398M / $0.55), which helped headline profitability despite markdowns — shows earnings can be supported by realized/unrealized accounting items. Yahoo Finance: Profit After Accounting Gain
• Neutral Sentiment: Q1 results showed a small operational miss (EPS $0.47 vs. $0.48 est.; revenue $763M vs. ~$779M est.) — modest shortfall but not a large shock. MarketBeat: Q1 Results Summary
• Neutral Sentiment: Software exposure (~22% of loans) was modestly trimmed and valuations were described as steady — mitigates a headline risk around SaaS defaults but keeps sector concentration visible. Reuters: Software Valuations Steady
• Negative Sentiment: Core earnings slipped slightly below the dividend and GAAP income fell sharply on markdowns — indicates mark-to-market volatility that can pressure distributable earnings if trends persist. Benzinga: Dividend Pressure Analysis
• Negative Sentiment: Analysts and articles flagged unrealized losses, spread widening and lower transaction activity — ongoing spread volatility could weigh on future earnings and NAV if credit conditions worsen. Investing.com: Unrealized Losses & Spread Widening

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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