Ares Capital (NASDAQ:ARCC – Get Free Report) was downgraded by research analysts at Wall Street Zen from a “hold” rating to a “sell” rating in a research report issued to clients and investors on Saturday, Wall Street Zen reports.
Several other analysts also recently commented on ARCC. Citigroup restated a “market outperform” rating on shares of Ares Capital in a research note on Wednesday. Truist Financial dropped their price target on Ares Capital from $22.00 to $21.00 and set a “buy” rating on the stock in a research note on Thursday, July 30th. Keefe, Bruyette & Woods decreased their price objective on Ares Capital from $21.00 to $20.00 and set an “outperform” rating for the company in a report on Thursday, July 30th. UBS Group upgraded shares of Ares Capital from a “neutral” rating to a “buy” rating and set a $21.00 target price on the stock in a report on Thursday. Finally, Weiss Ratings reiterated a “hold (c)” rating on shares of Ares Capital in a research note on Friday, September 4th. Nine equities research analysts have rated the stock with a Buy rating and two have given a Hold rating to the company’s stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $20.39.
Read Our Latest Report on Ares Capital
Ares Capital Price Performance
ARCC stock opened at $19.11 on Friday. The firm has a market capitalization of $13.80 billion, a PE ratio of 15.66 and a beta of 0.60. The company has a quick ratio of 1.00, a current ratio of 1.00 and a debt-to-equity ratio of 1.08. Ares Capital has a twelve month low of $17.40 and a twelve month high of $21.14. The stock has a 50-day simple moving average of $19.22 and a two-hundred day simple moving average of $19.03.
Ares Capital (NASDAQ:ARCC – Get Free Report) last released its quarterly earnings data on Tuesday, October 27th. The investment management company reported $0.46 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.48 by ($0.02). Ares Capital had a net margin of 28.34% and a return on equity of 9.72%. The business had revenue of $763.00 million for the quarter, compared to the consensus estimate of $776.34 million. During the same quarter in the prior year, the business posted $0.50 earnings per share. Ares Capital’s revenue for the quarter was down 2.4% on a year-over-year basis. On average, equities analysts predict that Ares Capital will post 1.88 EPS for the current fiscal year.
Institutional Trading of Ares Capital
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Chicago Partners Investment Group LLC lifted its holdings in Ares Capital by 2.5% during the 3rd quarter. Chicago Partners Investment Group LLC now owns 585,716 shares of the investment management company’s stock worth $10,918,000 after buying an additional 14,330 shares during the period. Basso Capital Management L.P. purchased a new position in Ares Capital during the third quarter valued at $327,000. Integras Partners LLC boosted its stake in shares of Ares Capital by 4.0% during the 3rd quarter. Integras Partners LLC now owns 119,295 shares of the investment management company’s stock worth $2,279,000 after acquiring an additional 4,538 shares during the last quarter. Integrity Advisory Solutions LLC purchased a new position in shares of Ares Capital in the 3rd quarter worth $195,000. Finally, Next Level Wealth Planning LLC purchased a new stake in shares of Ares Capital in the 3rd quarter worth $68,000. 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: UBS upgraded ARCC to “Buy” and set a $21 price target, implying roughly 10% upside from the referenced share price. The upgrade supports the bullish case that ARCC’s valuation and income profile remain attractive. UBS upgrade coverage
- Positive Sentiment: B. Riley Securities reiterated its Buy rating, indicating continued confidence in ARCC’s ability to generate shareholder returns despite recent earnings softness. B. Riley Buy rating
- Positive Sentiment: ARCC’s planned acquisition of MidCap Financial Investment Corporation (NASDAQ: MFIC) could expand its investment platform and portfolio scale. MFIC canceled its upcoming earnings call because of the pending transaction, confirming the deal is progressing. MidCap acquisition announcement
- Neutral Sentiment: Articles discussing the tax treatment of high-yield BDC dividends may increase investor awareness of ARCC’s ordinary-income taxation, but they do not represent a change in the company’s fundamentals or dividend policy. Dividend tax article
- Negative Sentiment: Third-quarter core EPS and net investment income declined to $0.46, below the $0.48 quarterly dividend and analysts’ $0.48 earnings estimate. Revenue also fell year over year, raising concerns about sustainable dividend coverage. Ares Capital third-quarter results
- Negative Sentiment: Analysts also pointed to a fourth consecutive quarterly decline in NAV and increased non-accrual investments. These credit-quality trends, combined with the earnings shortfall, led to a more cautious “Hold” view from some coverage despite ARCC trading below book value. Ares Capital Hold analysis
Ares Capital Company Profile
Ares Capital Corporation (NASDAQ: ARCC) is a business development company that provides financing to middle-market companies. The company primarily invests in first-lien senior secured loans, second-lien loans, subordinated debt, and, to a lesser extent, equity securities. Its investments are generally designed to support acquisitions, recapitalizations, refinancings, growth initiatives, and other corporate activities.
Founded in 2004, Ares Capital is externally managed by Ares Capital Management LLC, an affiliate of Ares Management Corporation.
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