Analyst Expectations For Ares Capital's Future

4 analysts have expressed a variety of opinions on Ares Capital ARCC over the past quarter, offering a diverse set of opinions from bullish to bearish.

The table below provides a snapshot of their recent ratings, showcasing how sentiments have evolved over the past 30 days and comparing them to the preceding months.

The 12-month price targets assessed by analysts reveal further insights, featuring an average target of $23.62, a high estimate of $24.50, and a low estimate of $23.00. This current average has increased by 1.24% from the previous average price target of $23.33.

Understanding Analyst Ratings: A Comprehensive Breakdown

The standing of Ares Capital among financial experts becomes clear with a thorough analysis of recent analyst actions. The summary below outlines key analysts, their recent evaluations, and adjustments to ratings and price targets.

Key Insights:

• Action Taken: In response to dynamic market conditions and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their reaction to recent developments related to Ares Capital. This insight gives a snapshot of analysts' perspectives on the current state of the company.
• Rating: Delving into assessments, analysts assign qualitative values, from 'Outperform' to 'Underperform'. These ratings communicate expectations for the relative performance of Ares Capital compared to the broader market.
• Price Targets: Analysts provide insights into price targets, offering estimates for the future value of Ares Capital's stock. This comparison reveals trends in analysts' expectations over time.

Navigating through these analyst evaluations alongside other financial indicators can contribute to a holistic understanding of Ares Capital's market standing. Stay informed and make data-driven decisions with our Ratings Table.

Stay up to date on Ares Capital analyst ratings.

Discovering Ares Capital: A Closer Look

Ares Capital Corp is a United States-based closed-ended specialty finance company. Its investment objective is to generate both current income and capital appreciation through debt and equity investments. The company focuses on investing primarily in U.S. middle-market companies with investment opportunities as well as in larger companies. Its portfolio comprises of first lien senior secured loans, second lien senior secured loans, and mezzanine debt (subordinated unsecured loan), which may include equity components that are diversified by industry and sector. The company may invest in preferred and common equity investments to a lesser proportion. Its revenue mainly consists of interest and dividend income received from the investment made.

Ares Capital: Delving into Financials

Market Capitalization Analysis: Below industry benchmarks, the company's market capitalization reflects a smaller scale relative to peers. This could be attributed to factors such as growth expectations or operational capacity.

Decline in Revenue: Over the 3 months period, Ares Capital faced challenges, resulting in a decline of approximately -18.18% in revenue growth as of 30 September, 2024. This signifies a reduction in the company's top-line earnings. As compared to competitors, the company encountered difficulties, with a growth rate lower than the average among peers in the Financials sector.

Net Margin: Ares Capital's net margin is impressive, surpassing industry averages. With a net margin of 91.2%, the company demonstrates strong profitability and effective cost management.

Return on Equity (ROE): Ares Capital's ROE falls below industry averages, indicating challenges in efficiently using equity capital. With an ROE of 3.13%, the company may face hurdles in generating optimal returns for shareholders.

Return on Assets (ROA): Ares Capital's financial strength is reflected in its exceptional ROA, which exceeds industry averages. With a remarkable ROA of 1.48%, the company showcases efficient use of assets and strong financial health.

Debt Management: Ares Capital's debt-to-equity ratio is below the industry average. With a ratio of 1.06, the company relies less on debt financing, maintaining a healthier balance between debt and equity, which can be viewed positively by investors.

The Basics of Analyst Ratings

Analyst ratings serve as essential indicators of stock performance, provided by experts in banking and financial systems. These specialists diligently analyze company financial statements, participate in conference calls, and engage with insiders to generate quarterly ratings for individual stocks.

Some analysts will also offer forecasts for metrics like growth estimates, earnings, and revenue to provide further guidance on stocks. Investors who use analyst ratings should note that this specialized advice comes from humans and may be subject to error.

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This article was generated by Benzinga's automated content engine and reviewed by an editor.