Ares Capital price target raised to $23.50 from $23.00 at BofA Securities

Investing.com - BofA Securities has raised its price target on Ares Capital (NASDAQ:ARCC) to $23.50 from $23.00 while maintaining a Buy rating on the stock. Currently trading at $22.42, ARCC sits within the analyst target range of $22-$26, with a notable dividend yield of 8.57%.

The firm cited Ares Capital’s "steady quarter" which was driven by relatively healthy credit, decent portfolio growth, and solid liquidity. According to InvestingPro, ARCC maintains a "GOOD" Financial Health Score of 2.68, supporting BofA’s positive assessment. The business development company (BDC) has successfully raised both debt and equity capital during the period.

BofA Securities noted that yield pressure appears to be stabilizing for Ares Capital, and the company is seeing signs of improving transaction volume expected in the second half of 2025.

The investment bank believes these factors should support top and bottom-line growth for the BDC going forward.

BofA Securities considers Ares Capital "one of the best positioned BDCs to gain share and generate strong risk-adjusted returns" despite what it describes as a "more complex market backdrop."

In other recent news, Ares Capital reported stable earnings for the second quarter of 2025, with a GAAP net income per share of $0.52 and core earnings per share of $0.50, consistent with the previous quarter. The company also saw a 3% increase in its total portfolio at fair value, reaching $27.9 billion. Despite some market volatility, Ares Capital demonstrated resilience and strategic growth. Following these results, Citizens JMP raised its price target for Ares Capital to $23.00, maintaining a Market Outperform rating, citing solid earnings. Similarly, Keefe, Bruyette & Woods also increased their price target to $23.00, highlighting the company’s strong fundamentals despite missing street expectations. B.Riley upgraded Ares Capital’s stock rating from Neutral to Buy, raising the price target to $23.50, due to the company’s strong performance and portfolio quality. The firm noted that Ares Capital’s adjusted net investment income matched its expectations, while the company reported modest growth in net asset value. These developments reflect Ares Capital’s stable financial performance and positive outlook from analysts.

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