Keefe, Bruyette & Woods Lowers Ares Capital (NASDAQ:ARCC) Price Target to $21.00

Key Points

• Keefe, Bruyette & Woods cut Ares Capital's price target to $21.00 from $22.00 while maintaining an "outperform" rating, implying roughly a 10.7% upside; several other brokers also trimmed targets and the consensus is a "Moderate Buy" with an average target of $21.25.
• Significant insider buying: CFO Scott C. Lem purchased 5,186 shares at $19.29 and CEO Michael Kort Schnabel bought 12,500 shares at $19.13 in February, materially increasing their stakes and signaling management confidence.
• Ares shares trade near $18.97 with a market cap of $13.62B and a P/E of 10.2; the company reported Q4 EPS of $0.50 (in line) and revenue of $793M, slightly below estimates, with a one‑year range of $17.40–$23.42.

Ares Capital (NASDAQ:ARCC - Get Free Report) had its price objective reduced by analysts at Keefe, Bruyette & Woods from $22.00 to $21.00 in a report released on Thursday,Benzinga reports. The brokerage presently has an "outperform" rating on the investment management company's stock. Keefe, Bruyette & Woods' price target indicates a potential upside of 10.70% from the stock's current price.

A number of other research firms also recently issued reports on ARCC. 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 report on Monday, February 9th. Wells Fargo & Company decreased their target price on Ares Capital from $21.00 to $20.00 and set an "overweight" rating on the stock in a report on Thursday, February 5th. Weiss Ratings reaffirmed a "hold (c+)" rating on shares of Ares Capital in a report on Monday, December 29th. UBS Group decreased their target price on Ares Capital from $21.00 to $19.00 and set a "neutral" rating on the stock in a report on Friday, March 13th. Finally, B. Riley Financial reaffirmed a "buy" rating on shares of Ares Capital in a report on Monday, February 9th. Seven equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and an average price target of $21.25.

Ares Capital Stock Performance

Shares of ARCC opened at $18.97 on Thursday. The company has a debt-to-equity ratio of 1.12, a current ratio of 1.70 and a quick ratio of 1.70. Ares Capital has a one year low of $17.40 and a one year high of $23.42. The firm has a market capitalization of $13.62 billion, a P/E ratio of 10.20 and a beta of 0.58. The business has a fifty day moving average of $18.62 and a 200 day moving average of $19.68.

Ares Capital (NASDAQ:ARCC - Get Free Report) last issued its quarterly earnings data on Wednesday, February 4th. The investment management company reported $0.50 EPS for the quarter, hitting the consensus estimate of $0.50. The company had revenue of $793.00 million during the quarter, compared to analyst estimates of $795.20 million. Ares Capital had a return on equity of 9.89% and a net margin of 42.56%.Ares Capital's revenue was up 4.5% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.55 earnings per share. As a group, sell-side analysts anticipate that Ares Capital will post 2.19 EPS for the current year.

Insider Buying and Selling at Ares Capital

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

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in ARCC. AQR Capital Management LLC increased its holdings in Ares Capital by 6.5% in the 1st quarter. AQR Capital Management LLC now owns 16,502 shares of the investment management company's stock valued at $365,000 after acquiring an additional 1,000 shares during the last quarter. Dynamic Technology Lab Private Ltd bought a new stake in Ares Capital in the 1st quarter valued at $273,000. Goldman Sachs Group Inc. increased its holdings in 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 valued at $62,824,000 after acquiring an additional 358,829 shares during the last quarter. Empowered Funds LLC increased its holdings 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 acquiring an additional 16,128 shares during the last quarter. Finally, UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC purchased a new position in Ares Capital during the 1st quarter valued at approximately $14,766,000. 27.38% of the stock is owned by hedge funds and other institutional investors.

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.

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