Deep Dive Into Ares Capital Stock: Analyst Perspectives (6 Ratings)

Across the recent three months, 6 analysts have shared their insights on Ares Capital ARCC, expressing a variety of opinions spanning from bullish to bearish.

The table below summarizes their recent ratings, showcasing the evolving sentiments within the past 30 days and comparing them to the preceding months.

Analysts have recently evaluated Ares Capital and provided 12-month price targets. The average target is $23.42, accompanied by a high estimate of $24.50 and a low estimate of $22.00. Observing a 1.83% increase, the current average has risen from the previous average price target of $23.00.

Analyzing Analyst Ratings: A Detailed Breakdown

The analysis of recent analyst actions sheds light on the perception of Ares Capital by financial experts. The following summary presents key analysts, their recent evaluations, and adjustments to ratings and price targets.

| Analyst | Analyst Firm | Action Taken | Rating |Current Price Target| Prior Price Target | |--------------------|-----------------------|---------------|---------------|--------------------|--------------------| |Paul Johnson |Keefe, Bruyette & Woods|Lowers |Outperform | $22.00|$23.00 | |Kenneth Lee |RBC Capital |Raises |Outperform | $24.00|$23.00 | |Paul Johnson |Keefe, Bruyette & Woods|Raises |Outperform | $23.00|$22.00 | |Finian O'Shea |Wells Fargo |Lowers |Overweight | $23.00|$24.00 | |Melissa Wedel |JP Morgan |Raises |Overweight | $24.50|$23.00 | |Timothy O'Shea |Wells Fargo |Raises |Overweight | $24.00|$23.00 |

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: Offering a comprehensive view, analysts assess stocks qualitatively, spanning from 'Outperform' to 'Underperform'. These ratings convey expectations for the relative performance of Ares Capital compared to the broader market.
• Price Targets: Analysts navigate through adjustments in price targets, providing estimates for Ares Capital's future value. Comparing current and prior targets offers insights into analysts' evolving expectations.

Understanding these analyst evaluations alongside key financial indicators can offer valuable insights into Ares Capital's market standing. Stay informed and make well-considered decisions with our Ratings Table.

Stay up to date on Ares Capital analyst ratings.

Unveiling the Story Behind Ares Capital

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 first lien senior secured loans (including unitranche loans, which are loans that combine both senior and subordinated debt, generally in a first lien position) and second lien senior secured loans. In addition to senior secured loans, the company also invests in subordinated loans and preferred equity, it also makes common equity investments.

Ares Capital: Financial Performance Dissected

Market Capitalization Perspectives: The company's market capitalization falls below industry averages, signaling a relatively smaller size compared to peers. This positioning may be influenced by factors such as perceived growth potential or operational scale.

Revenue Growth: Ares Capital's revenue growth over a period of 3M has faced challenges. As of 31 December, 2024, the company experienced a revenue decline of approximately -11.49%. This indicates a decrease in the company's top-line earnings. When compared to others in the Financials sector, the company faces challenges, achieving a growth rate lower than the average among peers.

Net Margin: Ares Capital's financial strength is reflected in its exceptional net margin, which exceeds industry averages. With a remarkable net margin of 90.84%, the company showcases strong profitability and effective cost management.

Return on Equity (ROE): Ares Capital's ROE is below industry standards, pointing towards difficulties in efficiently utilizing equity capital. With an ROE of 2.73%, the company may encounter challenges in delivering satisfactory returns for shareholders.

Return on Assets (ROA): The company's ROA is below industry benchmarks, signaling potential difficulties in efficiently utilizing assets. With an ROA of 1.29%, the company may need to address challenges in generating satisfactory returns from its assets.

Debt Management: Ares Capital's debt-to-equity ratio is below the industry average at 1.03, reflecting a lower dependency on debt financing and a more conservative financial approach.

Analyst Ratings: What Are They?

Analysts work in banking and financial systems and typically specialize in reporting for stocks or defined sectors. Analysts may attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish "analyst ratings" for stocks. Analysts typically rate each stock once per quarter.

Some analysts publish their predictions for metrics such as growth estimates, earnings, and revenue to provide additional guidance with their ratings. When using analyst ratings, it is important to keep in mind that stock and sector analysts are also human and are only offering their opinions to investors.

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