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Investing.com - B.Riley has upgraded Ares Capital (NASDAQ:ARCC) from Neutral to Buy while raising its price target to $23.50 from $22.50, citing the company’s strong performance and portfolio quality. The new target represents potential upside from the current price of $22.54, with InvestingPro data showing the company maintains a healthy market capitalization of $15.65 billion.
The upgrade follows Ares Capital’s adjusted net investment income (NII) of $0.50 per share, which matched B.Riley’s expectations. The business development company (BDC) also reported modest growth in net asset value (NAV), while maintaining impressive revenue growth of 12% and an attractive P/E ratio of 11.2.
B.Riley highlighted Ares Capital’s historical track record of capital deployment and above-average recovery rates compared to its peer group during periods of economic volatility, while maintaining NAV preservation.
The investment firm believes these factors position Ares Capital to outperform its peer group in the current origination environment, despite emerging earnings pressures across the BDC sector.
B.Riley sees an attractive risk/reward profile in Ares Capital’s high-quality, diversified portfolio, robust credit quality, and fully covered dividend.
In other recent news, Ares Capital Corporation reported stable financial results for the second quarter of 2025. The company achieved a GAAP net income per share of $0.52 and core earnings per share of $0.50, maintaining consistency with the previous quarter. Ares Capital’s total portfolio at fair value saw a 3% increase quarter-over-quarter, reaching $27.9 billion. This growth occurred despite market volatility influenced by policy changes. The company’s resilience and strategic growth were evident in these results. These developments highlight Ares Capital’s ability to navigate challenging market conditions effectively. Investors may find these figures reassuring as they reflect the company’s stable performance and strategic investment gains.
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