Raymond James initiates Ares Management stock with Market Perform rating

Investing.com - Raymond (NSE:RYMD) James initiated coverage on Ares Management, L.P. (NYSE:ARES), a $60.8 billion market cap alternative asset manager, with a Market Perform rating on Monday. According to InvestingPro data, the company has demonstrated impressive performance with strong returns over the past decade.

The investment firm cited Ares’ growth outlook and strong position in direct lending as positives, but noted a lack of near-term catalysts for the stock.

Raymond James believes Ares is fairly valued at its current 32x next-twelve-months price-to-earnings multiple, which exceeds the alternative asset management sector’s 2026 estimated P/E average of 20x.

The premium valuation is justified by Ares’ purely fee-based business model with minimal balance sheet exposure and superior growth profile compared to peers, according to the firm.

Raymond James highlighted Ares’ guidance for 16-20% compound annual growth rate in fee-related earnings through 2028, with further margin improvements expected as the company deploys approximately $81.5 billion in committed assets that currently do not generate fees.

In other recent news, Ares Management Corporation has made several strategic moves that have caught the attention of investors. The company announced the acquisition of a 20% stake in Plenitude for €2 billion, valuing the company at an enterprise value of over €12 billion. This significant investment underscores Ares Management’s commitment to expanding its portfolio. Additionally, Ares is playing a pivotal role in financing Clearlake Capital Group’s $5.5 billion private debt deal for the acquisition of Dun & Bradstreet Holdings Inc., marking one of the largest private credit agreements in history.

In terms of personnel changes, Ares Management has appointed Jon Plavnick as a Partner to its Infrastructure Debt team, and Spencer Ivey has relocated to Sydney to enhance the firm’s strategy in the Asia-Pacific region. The company also named Sarah Cole as Partner and Co-Head of the Global Capital Solutions team, where she will work to strengthen strategic relationships with various financial institutions. On the analyst front, TD Cowen has increased its price target for Ares Management to $204, maintaining a Buy rating, reflecting confidence in the company’s platform capabilities. These developments highlight Ares Management’s ongoing efforts to expand its influence and operational capacity in the financial sector.

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