
Ares Capital (ARCC) Stock Forecast & Price Target
Ares Capital (ARCC) Analyst Ratings
Bulls say
Ares Capital Corp reported a 0.4% sequential increase in net asset value (NAV) per share, bringing it to $19.90, supported by solid net investment income (NII) and positive unrealized and realized gains. The company is well-positioned to benefit from a potential rise in interest rates by more than 100 basis points, which is expected to enhance net investment income. Moreover, while there was a slight increase in non-accruals to 2.0% of the portfolio, the overall credit quality remains strong and significantly better than historical averages, contributing to a favorable investment outlook.
Bears say
Ares Capital Corp faces significant challenges that adversely affect its financial outlook, primarily due to potential poor underwriting practices, which could erode confidence among liquidity supporters. Additionally, the company's reliance on floating-rate loans with LIBOR floors exposes it to risks, as increases in interest rates could negatively impact net investment income. Finally, the firm's reliance on structuring fees for a substantial portion of its revenue (approximately 10-15%) raises concerns about earnings stability amid potential declines in deal activity.
This aggregate rating is based on analysts' research of Ares Capital and is not a guaranteed prediction by Public.com or investment advice.
Ares Capital (ARCC) Analyst Forecast & Price Prediction
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