
Ares Capital (ARCC) Stock Forecast & Price Target
Ares Capital (ARCC) Analyst Ratings
Bulls say
Ares Capital Corp has demonstrated a solid financial performance, highlighted by a 0.4% increase in net asset value (NAV) per share on a sequential basis and a 1.5% year-over-year increase, bringing NAV to $19.90. The company's favorable positioning towards a potential rise in interest rates beyond 100 basis points is expected to enhance net investment income, further supporting its income generation strategy. Despite a slight increase in non-accruals, the overall credit quality remains strong and well below historical averages, indicating a resilient investment portfolio.
Bears say
The analysis indicates several fundamental concerns regarding Ares Capital's financial outlook. The company's heavy reliance on floating rate loans, particularly those with LIBOR floors, renders it vulnerable to rising interest rates, as any significant increase could lead to a decline in net investment income. Additionally, the potential for poor underwriting practices poses a risk of eroding confidence among liquidity supporters, while a cessation of deal activity could negatively impact earnings due to the reliance on structuring fees, which account for approximately 10-15% of revenues.
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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