Ares Management Selloff Overdone Given Growth Outlook, RBC Says

MT Newswires Live02-25

Ares Management's (ARES) recent pullback, driven by negative sentiment around private credit, appears overdone given the company's capital-light model, roughly 20% earnings growth outlook, and 3.5% dividend yield, RBC Capital Markets said in a Monday note.

The brokerage said about 65% of the company's assets under management are in private credit, which has weighed on the stock, now trading near 19.5x forward distributable earnings versus a roughly 24x historical average.

The analysts said positive factors include Ares' capital-light, fee-driven model, about 20% long-term distributable earnings per share growth and a $130 trillion-plus addressable market.

The firm maintained its outperform rating on the stock with a price target of $173, down from $180.

Shares of the company were up 2% in recent Tuesday trading.

Price: 117.85, Change: +3.28, Percent Change: +2.86

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