
Ares Capital (ARCC) Stock Forecast & Price Target
Ares Capital (ARCC) Analyst Ratings
Bulls say
Ares Capital Corp reported a sequential increase of 0.4% in Net Asset Value (NAV) per share, reaching $19.90, driven by solid net investment income (NII) along with positive unrealized and realized gains. The company is favorably positioned for a potential rise in interest rates, expected to enhance net investment income due to its focus on first lien and second lien senior secured loans. Moreover, the overall credit quality remains robust, with non-accruals at 2.0% of the portfolio, which is still well below historical averages, indicating a stable investment environment.
Bears say
Ares Capital's stock outlook is negatively impacted by concerns over poor underwriting practices, which may erode confidence among liquidity supporters and ultimately destabilize the company’s funding. The company’s portfolio predominantly consists of floating-rate loans, and an increase of 100 basis points in interest rates could adversely affect net investment income due to the mismatch between liabilities and assets lacking a LIBOR floor. Additionally, the reliance on structuring fees for 10-15% of total revenues heightens earnings risk in the event of decreased deal activity, further contributing to the negative financial outlook.
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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