Reassessing The Changing Outlook For Ares Capital Corporation (ARCC)

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    With over 1.71 million Ares Capital Corporation (ARCC) shares trading Friday and a closing price of $14.10 on the day, the dollar volume was approximately $24.07 million. The shares have shown a positive weekly performance of 2.40% and its price on 07/31/20 gained nearly 1.37%. Currently, there are 422.62M common shares owned by the public.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 16 analysts who have offered their price forecasts for ARCC have a consensus price objective of $15.30. The analysts have set the share’s price value over the next 12 months at a high of $16.75 and a low of $13.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Ares Capital Corporation stock is 1.70 for the next 12 months. The average price target is 7.72% above its last price level and an upside to the estimated low will see the stock lose -8.46% over that period. But an upside of 15.82% will see the stock hit the forecast high price target while mean target price for the stock is $15.50.

    Insiders at the company have transacted a total of 12 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 12 of these insider trades were purchases, accounting for 41,819 shares. Insider sales of the common stock occurred on 0 occasions, with total insider shares sold totaling 0 shares.

    The top 3 mutual fund holders in Ares Capital Corporation are VanEck Vectors – BDC Income ETF, Dynamic Alternative Yield Fund, and Lord Abbett Value Opportunities F. VanEck Vectors – BDC Income ETF owns 2.24 million shares of the company’s stock, all valued at over $32.43 million. The company bought an additional 6607.0 shares recently to bring their total holdings to about 0.53% of the shares outstanding. Dynamic Alternative Yield Fund sold -0.35 million shares to see its total holdings shrink to 1.81 million shares valued at over $26.16 million and representing 0.43% of the shares outstanding. Lord Abbett Value Opportunities F sold 46900.0 shares to bring its total holdings to over 1.4 million shares at a value of $20.24 million. Lord Abbett Value Opportunities F now owns shares totaling to 0.33% of the shares outstanding.

    Shares of Ares Capital Corporation (NASDAQ: ARCC) opened at $13.95, up $0.04 from a prior closing price of $13.91. However, the script later closed the day at $14.10, up 1.37%. The company’s stock has a 5-day price change of 2.40% and 13.85% over the past three months. ARCC shares are trading -24.40% year to date (YTD), with the 12-month market performance down to -22.87% lower. It has a 12-month low price of $7.90 and touched a high of $19.33 over the same period. Currently, 1.71 million shares have been traded, compared to an average intraday trading volume of 2.44 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 0.35%, -3.38%, and -11.76% respectively.

    Institutional ownership of Ares Capital Corporation (NASDAQ: ARCC) shares accounts for 36.16% of the company’s 422.62M shares outstanding. Mutual fund holders own –, while other institutional holders and individual stakeholders account for — and — respectively.

    It has a market capitalization of $5.96B. The earnings-per-share (ttm) stands at -$0.08. Price movements for the stock have been influenced by the stock’s volatility, which stands at 2.02% over the week and 2.62% over the month.

    Analysts forecast that Ares Capital Corporation (ARCC) will achieve an EPS of $0.38 for the current quarter, $0.39 for the next quarter and $1.67 for 2021. The lowest estimate earnings-per-share for the quarter is $0.34 while analysts give the company a high EPS estimate of $0.42. Comparatively, EPS for the current quarter was $0.49 a year ago. Earnings per share for the fiscal year are expected to decrease by -16.40%, and 5.70% over the next financial year. EPS should shrink at an annualized rate of 3.00% over the next five years, compared to 4.42% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 16 brokerage firm advisors rate Ares Capital Corporation (ARCC) as a “Strong Buy” at a consensus score of 1.70. Specifically, 14 Wall Street analysts polled rate the stock as a buy, while 1 of the 16 advise that investors “hold,” and 0 rated it as a “Sell.”

    Looking at the support for the ARCC, a number of firms have released research notes about the stock. Raymond James stated their Outperform rating for the stock in a research note on April 16, 2020, with the firm’s price target at $14. BofA/Merrill coverage for the Ares Capital Corporation (ARCC) stock in a research note released on April 13, 2020 offered a Buy rating with a price target of $16. Compass Point was of a view on April 02, 2020 that the stock is Buy, while RBC Capital Mkts gave the stock Outperform rating on November 12, 2019, issuing a price target of $20. Raymond James on their part issued Mkt Perform rating on October 22, 2019.

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