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On Tuesday, TD Cowen analysts adjusted their outlook on Ares Management, L.P. (NYSE:ARES), increasing the price target to $184 from the previous $161 while reaffirming a Buy rating on the stock. The revision follows the company’s first-quarter results released last Monday, which analysts believe could propel the stock further, despite already witnessing an intra-day rise of over 3% and outperforming expectations. According to InvestingPro data, the stock has shown strong momentum with a 5.22% return in the past week, though it currently trades at a P/E ratio of 77.9x.
The analysts highlighted the company’s robust performance and growth potential as key drivers for the elevated price target. They noted Ares Management’s resilience and growth in flows, which continue to impress, and expect these factors to support the stock’s upward trajectory. The adjustments in the 2025-2026 estimated returns and income contributed to the new 12-month price target, which reflects a $23 increase. The company has demonstrated strong financial performance with revenue growth of 6.96% in the last twelve months and maintains a healthy dividend growth rate of 45.45% year-over-year.
TD Cowen analysts expressed a positive stance on the asset quality at Ares Management and its peers, as well as the global wealth management sector. They also pointed out the favorable fundamentals in fee-related earnings (FRE) margins and debt/loan economics. The analysts’ commentary underscored their confidence in the momentum and defensiveness of the Ares Management franchise moving forward. InvestingPro analysis shows the company maintains a "GOOD" overall financial health score, with particularly strong ratings in profit and price momentum metrics. For deeper insights into Ares Management’s financial health and growth prospects, including 12 additional ProTips and comprehensive valuation metrics, check out the full Pro Research Report available on InvestingPro.
The endorsement of the Buy rating by TD Cowen comes with an optimistic view on the company’s future, as analysts see Ares Management well-positioned within the industry. The firm’s recent performance and strategic positioning were key considerations in the analysts’ assessment and subsequent price target upgrade. The company has maintained dividend payments for 12 consecutive years and boasts a gross profit margin of 44.83%, underlining its operational efficiency and commitment to shareholder returns.
In other recent news, Ares Management has reported impressive first-quarter 2025 financial results, surpassing Wall Street’s expectations. The company achieved an earnings per share (EPS) of $1.09, exceeding the forecasted $0.98, and reported revenues of $922 million, above the anticipated $912.36 million. This strong performance was bolstered by an 18% year-over-year increase in management fees and a 22% rise in fee-related earnings. Additionally, Ares Management completed the acquisition of GCP International, enhancing its infrastructure capabilities and contributing to its robust financial results.
JPMorgan has responded to these developments by raising Ares Management’s stock price target to $163 from $149, maintaining an Overweight rating. The acquisition of GCP also played a significant role, adding $45.3 billion in capital, which helped Ares conclude the quarter with $142 billion in available capital. This positions the firm well to capitalize on market opportunities, with $99 billion of its capital not yet generating fees. Ares Management’s total deployment for the quarter was a strong $31.4 billion, reflecting a year-over-year increase from $18.6 billion.
The firm’s fee-paying assets under management (FPAUM) reached $335 billion, surpassing the consensus estimate of $332 billion. Ares Management also highlighted the resilience of its portfolio against macroeconomic challenges, citing positive indicators such as over 11% year-over-year EBITDA growth for U.S. direct lending borrowers. Looking forward, Ares Management remains optimistic about its growth prospects, projecting continued expansion in alternative and private credit markets.
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