Blue Owl stock rating affirmed, $32 target by JMP Securities

On Tuesday, JMP Securities maintained a positive outlook on Blue Owl Capital (NYSE: OWL) shares, reiterating a Market Outperform rating with a steady price target of $32.00. The firm’s analysis highlighted Blue Owl’s potential for substantial growth over the next five years or more, emphasizing the significant opportunities within the company’s reach to expand in all major aspects of its operations. This optimism appears well-founded, as InvestingPro data shows the company has achieved impressive 32.56% revenue growth in the last twelve months, with a market capitalization of $35.47 billion.

According to JMP Securities, even slight gains in market share within Blue Owl’s large end markets could notably accelerate the company’s growth rates. The firm’s analysts pointed out the predictability of Blue Owl’s business model, noting that approximately 80% of the company’s assets under management (AUM) are permanent, which implies stability as the company does not typically experience large outflows. InvestingPro analysis reinforces this stability, showing the company maintains a "GREAT" Financial Health Score and offers a steady 3.03% dividend yield. For deeper insights into Blue Owl’s financial health metrics and growth potential, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.

The analysts further elaborated on the revenue structure of Blue Owl, where around 90% is derived from this permanent capital. They also mentioned that the company’s earnings are solely influenced by fee-related earnings (FRE), which are a product of fundraising and capital deployment activities. Blue Owl’s fee rates are reportedly higher than industry averages, and a significant portion of the firm’s AUM starts generating fees upon deployment, providing clear visibility into the company’s growth and earnings trajectory.

The emphasis on Blue Owl’s robust and predictable revenue streams, coupled with the potential for market share gains, underscores JMP Securities’ confidence in the company’s financial prospects. The $32.00 price target suggests that the firm believes the stock has room to appreciate from its current levels, reflecting an optimistic view on Blue Owl’s future performance in the market.

In other recent news, Blue Owl Capital has been in the spotlight with various developments. Analysts at TD Cowen raised their stock target for Blue Owl Capital to $30, citing the company’s impressive performance in Digital Infrastructure and Global Wealth Management. The firm’s fourth-quarter results and insights shared during the investor day were among the factors that influenced this adjustment.

JPMorgan, on the other hand, maintained a Neutral rating on Blue Owl Capital with a steady price target of $23. Despite falling short of the anticipated Distributable Earnings per share, Blue Owl reported a record quarter of capital raising, totaling $9.5 billion in equity commitments and $4.3 billion in the credit segment.

In another development, Pagaya (NASDAQ:PGY) Technologies entered into a significant forward flow agreement with Blue Owl Managed Funds. The deal, which involves selling up to $2.4 billion in consumer loans via Pagaya’s network, is part of the company’s strategy to fund loan originations efficiently.

Furthermore, JMP Securities analyst Brian McKenna adjusted the price target for Blue Owl Capital stock, increasing it to $32.00 from the previous $30.00. The analyst expressed satisfaction with Blue Owl’s key business drivers and noted the company’s entrance into 2025 with considerable momentum.

These are among the recent developments involving Blue Owl Capital, reflecting the company’s active role in the financial sector and the positive outlook from various analysts.

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