
Ares Capital (ARCC) Stock Forecast & Price Target
Ares Capital (ARCC) Analyst Ratings
Bulls say
Ares Capital's stock shows a positive outlook due to a 0.4% sequential and 1.5% year-over-year increase in net asset value (NAV) per share, reaching $19.90, driven by strong net investment income (NII) and favorable unrealized/realized gains. The company's strategic focus on senior secured loans positions it advantageously for a potential interest rate rise of over 100 basis points, which is expected to further enhance NII. Additionally, despite a slight uptick in non-accruals to 2.0% of the portfolio, the underlying credit quality remains robust and well below historical averages, reinforcing the financial foundation of Ares Capital.
Bears say
Ares Capital's stock outlook is negatively impacted by poor underwriting practices, which could undermine the confidence of liquidity supporters critical to its financing structure. The company's reliance on floating-rate loans indexed to LIBOR means that a 100 basis point increase in rates could significantly reduce net investment income, further straining financial performance. Additionally, the reliance on structuring fees for approximately 10-15% of revenue heightens the risk of earnings volatility, particularly in the event of a decline 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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