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Investing.com - Citizens JMP has raised its price target on Ares Capital (NASDAQ:ARCC) to $23.00 from $22.00 while maintaining a Market Outperform rating. The business development company, currently trading at $22.63 with a market capitalization of $16 billion, offers an attractive 8.5% dividend yield and trades at a P/E ratio of 11.1.
The price target increase follows Ares Capital’s second-quarter 2025 earnings report released Tuesday, which Citizens JMP described as "solid."
Ares Capital reported core earnings per share of $0.50 for the quarter, one penny below both Citizens JMP’s estimate and the consensus forecast. GAAP earnings per share came in at $0.52.
The company’s quarterly performance included $0.05 of realized gains partially offset by $0.02 of unrealized losses, while generating a 10% return on equity, consistent with the first quarter.
Net asset value (NAV) per share increased 0.4% sequentially and 1.5% year-over-year to $19.90, driven by solid net investment income and positive unrealized and realized gains.
In other recent news, Ares Capital Corporation reported stable earnings for the second quarter of 2025, with a GAAP net income of $0.52 per share and core earnings of $0.50 per share, maintaining consistency with the previous quarter. The company’s total portfolio at fair value grew by 3% from the previous quarter, reaching $27.9 billion, showcasing resilience amid market volatility. B.Riley upgraded Ares Capital’s stock rating from Neutral to Buy, citing strong performance and portfolio quality, and increased the price target to $23.50 from $22.50. Additionally, Ares Capital’s adjusted net investment income of $0.50 per share met B.Riley’s expectations, and the company reported modest growth in net asset value. Keefe, Bruyette & Woods also raised its price target for Ares Capital to $23.00 from $22.00, maintaining an Outperform rating due to the company’s sector-leading fundamentals. Despite missing street expectations and an increase in non-accruals, Ares Capital managed to generate offsetting gains in its portfolio, keeping non-accruals less than half the sector average. These developments highlight Ares Capital’s strategic growth and strong fundamentals in the current market environment.
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