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Ares Capital’s Analyst Ratings Suggest Stable Earnings in 2017

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Analysts’ ratings for Ares Capital

Ares Capital’s (ARCC) analyst ratings have implied improving operating performance over the past few months. In February 2017, 12 of the 17 analysts covering the company, or ~71%, have rated it as a “buy” or a “strong buy.” Five analysts have rated it as a “hold.” Its ratings reflect steady growth and future expected performance on acquisitions and originations.

Since January 2017, Ares Capital’s ratings have risen, with its “strong buy” ratings rising from three to four. Its “hold” ratings have fallen from five to four. Analysts have given Ares Capital a one-year price target of $17.96, implying marginal growth of 1%.

Analyst ratings

Ares Capital’s industry peers

Among Ares Capital’s major middle-market lending peers, Prospect Capital (PSEC) has had two out of seven analysts rate it as a “buy” or a “strong buy” in February 2017. Two analysts, or ~28%, have rated it as a “hold.” One analyst has rated the company as an “underperform, ” and two analysts have rated it as a “sell.”

For BlackRock Capital Investment (BKCC), all five analysts covering the stock have given it “holds.” For Apollo Investment (AINV), three of the 14 analysts covering the stock have rated it as a “buy” or a “strong buy,” nine analysts have given it “holds,” and two have given it “underperform” or “sell” ratings. Together, Ares Capital’s peers make up 6.3% of the PowerShares Global Listed Private Equity ETF (PSP).

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