Ares Capital (NASDAQ:ARCC) Downgraded to Sell Rating by Wall Street Zen

Wall Street Zen lowered shares of Ares Capital (NASDAQ:ARCC) from a hold rating to a sell rating in a research report sent to investors on Sunday morning.

A number of other brokerages have also issued reports on ARCC. Citizens Jmp cut their target price on Ares Capital from $23.00 to $22.00 and set a “market outperform” rating on the stock in a research report on Wednesday, April 22nd. Oppenheimer dropped their price target on shares of Ares Capital from $22.00 to $21.00 and set an “outperform” rating for the company in a research note on Wednesday, April 29th. Wells Fargo & Company reaffirmed an “equal weight” rating and issued a $19.00 price target (down from $20.00) on shares of Ares Capital in a report on Friday, June 12th. Royal Bank Of Canada reduced their price objective on shares of Ares Capital from $22.00 to $21.00 and set an “outperform” rating on the stock in a research note on Wednesday, April 29th. Finally, Keefe, Bruyette & Woods decreased their price objective on shares of Ares Capital from $21.00 to $20.00 and set an “outperform” rating for the company in a report on Thursday. Eight investment analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company’s stock. According to MarketBeat.com, Ares Capital presently has an average rating of “Moderate Buy” and a consensus target price of $20.40.

Ares Capital Stock Performance

Shares of ARCC stock opened at $18.76 on Friday. The company has a debt-to-equity ratio of 1.14, a current ratio of 1.28 and a quick ratio of 1.28. The company’s fifty day moving average price is $18.67 and its two-hundred day moving average price is $18.89. The firm has a market capitalization of $13.47 billion, a P/E ratio of 13.90 and a beta of 0.56. Ares Capital has a 12 month low of $17.40 and a 12 month high of $22.85.

Ares Capital (NASDAQ:ARCC) last announced its earnings results on Wednesday, July 29th. The investment management company reported $0.47 earnings per share for the quarter, meeting the consensus estimate of $0.47. Ares Capital had a return on equity of 9.80% and a net margin of 30.91%.The company had revenue of $768.00 million during the quarter, compared to the consensus estimate of $770.19 million. During the same period last year, the firm earned $0.50 earnings per share. On average, research analysts anticipate that Ares Capital will post 1.9 earnings per share for the current fiscal year.

Ares Capital Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 30th. Shareholders of record on Tuesday, September 15th will be issued a $0.48 dividend. This represents a $1.92 dividend on an annualized basis and a yield of 10.2%. The ex-dividend date of this dividend is Tuesday, September 15th. Ares Capital’s payout ratio is currently 142.22%.

Institutional Trading of Ares Capital

Several institutional investors have recently added to or reduced their stakes in the business. Strs Ohio acquired a new stake in shares of Ares Capital in the 1st quarter worth about $189,210,000. UBS Group AG boosted its stake in Ares Capital by 41.8% during the 4th quarter. UBS Group AG now owns 11,201,905 shares of the investment management company’s stock valued at $226,615,000 after purchasing an additional 3,301,890 shares during the period. Marshall Wace LLP acquired a new position in Ares Capital during the 3rd quarter valued at about $36,943,000. Altshuler Shaham Ltd bought a new position in Ares Capital in the 4th quarter worth about $33,380,000. Finally, Michael & Susan Dell Foundation bought a new position in Ares Capital in the 4th quarter worth about $26,089,000. Institutional investors 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: Second-quarter earnings held up, with adjusted EPS of $0.47 matching estimates and investment income remaining resilient. Management also highlighted ARCC’s scale, improving lending terms and balance-sheet flexibility despite a slower transaction market. Ares Capital’s Q2 Earnings Call Highlights Market Strength
• Positive Sentiment: ARCC declared a quarterly dividend of $0.48 per share, payable September 30 to shareholders of record September 15. The roughly 10.2% annualized yield and 17-year dividend streak support the stock’s appeal to income-focused investors. Ares Capital Just Extended Its Dividend Streak to 17 Years
• Positive Sentiment: Truist maintained a “buy” rating with a $21 price target, while Keefe, Bruyette & Woods retained an “outperform” rating with a $20 target, indicating analysts still see potential upside from current levels. Analyst Price Target Updates
• Neutral Sentiment: Broader private-credit results remained resilient, and strong fundraising across the Ares platform points to continued institutional demand. However, elevated defaults, retail redemptions and liquidity concerns remain important industry risks. Private Credit Roundup
• Negative Sentiment: Five ARCC borrowers were moved to non-accrual status during the second quarter. The largest was an $84.6 million subordinated loan to AmeriVet Veterinary Partners, raising concerns about portfolio credit quality and potential pressure on net asset value. Ares BDC Moves Five Borrowers to Non-Accrual
• Negative Sentiment: Although quarterly revenue was close to expectations, year-over-year expenses increased and unrealized losses weighed on results. Both Truist and KBW lowered their price targets, signaling a more cautious outlook even while keeping positive ratings. ARCC Stock Dips as Q2 Earnings Meet Estimates

Ares Capital Company Profile

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.