Ares Commercial Real Estate Corporation (NYSE:ACRE) Stock Has Average Price Target of $5.25

Key Points

• Analysts remain cautious: Ares Commercial Real Estate has a consensus “Reduce” rating, with two sell, four hold, and one buy recommendation. The average 12-month price target is $5.25, compared with a recent share price of $4.20.
• Quarterly results exceeded expectations: The REIT reported earnings of $0.12 per share versus the $0.04 consensus estimate, while revenue reached $14.36 million against expectations of $10.96 million. However, it posted a negative net margin of 8.04%.
• High dividend yield carries risk: ACRE declared a quarterly dividend of $0.15, or $0.60 annualized, representing a 14.3% yield. Its payout ratio was deeply negative at -750%, reflecting the company’s loss-making position.

Shares of Ares Commercial Real Estate Corporation (NYSE:ACRE - Get Free Report) have earned a consensus rating of "Reduce" from the seven ratings firms that are covering the stock, MarketBeat.com reports. Two investment analysts have rated the stock with a sell rating, four have assigned a hold rating and one has given a buy rating to the company. The average 12-month price target among brokerages that have issued ratings on the stock in the last year is $5.25.

A number of research firms have commented on ACRE. Wall Street Zen upgraded shares of Ares Commercial Real Estate from a "sell" rating to a "hold" rating in a research note on Saturday, August 15th. UBS Group assumed coverage on shares of Ares Commercial Real Estate in a research note on Tuesday, June 2nd. They set a "neutral" rating and a $5.50 target price for the company. Zacks Research raised Ares Commercial Real Estate from a "strong sell" rating to a "hold" rating in a report on Friday, July 10th. Weiss Ratings cut Ares Commercial Real Estate from a "sell (d+)" rating to a "sell (d)" rating in a research report on Monday, September 14th. Finally, JPMorgan Chase & Co. reduced their price objective on Ares Commercial Real Estate from $5.50 to $5.00 and set a "neutral" rating for the company in a research note on Friday, July 17th.

Ares Commercial Real Estate Price Performance

Shares of Ares Commercial Real Estate stock opened at $4.20 on Friday. The firm's fifty day simple moving average is $4.53 and its 200-day simple moving average is $4.74. The stock has a market capitalization of $233.13 million, a price-to-earnings ratio of -52.52 and a beta of 1.16. Ares Commercial Real Estate has a 12 month low of $4.11 and a 12 month high of $5.89.

Ares Commercial Real Estate (NYSE:ACRE - Get Free Report) last issued its quarterly earnings results on Monday, August 3rd. The real estate investment trust reported $0.12 earnings per share for the quarter, topping analysts' consensus estimates of $0.04 by $0.08. The firm had revenue of $14.36 million during the quarter, compared to analysts' expectations of $10.96 million. Ares Commercial Real Estate had a negative net margin of 8.04% and a positive return on equity of 4.08%. Analysts anticipate that Ares Commercial Real Estate will post 0.39 earnings per share for the current year.

Ares Commercial Real Estate Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Thursday, October 15th. Stockholders of record on Wednesday, September 30th will be issued a $0.15 dividend. The ex-dividend date of this dividend is Wednesday, September 30th. This represents a $0.60 dividend on an annualized basis and a dividend yield of 14.3%. Ares Commercial Real Estate's payout ratio is presently -750.00%.

Institutional Investors Weigh In On Ares Commercial Real Estate

Several large investors have recently modified their holdings of the stock. Highland Investment Advisors LLC purchased a new position in Ares Commercial Real Estate in the 2nd quarter valued at $27,000. Optiver Holding B.V. increased its stake in Ares Commercial Real Estate by 603.3% in the 1st quarter. Optiver Holding B.V. now owns 6,513 shares of the real estate investment trust's stock valued at $31,000 after buying an additional 5,587 shares during the period. State of Wyoming purchased a new position in Ares Commercial Real Estate during the 2nd quarter worth $59,000. Eurizon Capital SGR S.p.A. purchased a new position in Ares Commercial Real Estate during the 4th quarter worth $65,000. Finally, Attessa Capital LLC acquired a new stake in shares of Ares Commercial Real Estate in the 2nd quarter worth $76,000. Hedge funds and other institutional investors own 41.34% of the company's stock.

Ares Commercial Real Estate Company Profile

Ares Commercial Real Estate Corporation NYSE: ACRE is a specialty finance company focused on commercial real estate lending and related investments. It operates as a real estate investment trust and primarily seeks to generate income by originating and investing in loans secured by commercial properties.

The company's portfolio has historically included senior mortgage loans, mezzanine loans and other forms of commercial real estate financing. Its lending activities support properties across a range of sectors, including office, multifamily, industrial, retail, hospitality and other commercial property types, with a focus on markets in the United States.

Founded in 2011 and publicly listed in 2012, Ares Commercial Real Estate is externally managed by an affiliate of Ares Management Corporation.

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