Citizens Adjusts Price Target#
Citizens Financial Group has lowered its price target for Ares Capital (NASDAQ:ARCC) from $23.00 to $22.00. Despite this adjustment, the firm maintains a 'Market Outperform' rating, indicating that they still expect Ares Capital to perform better than the market average.
Impact of Q1 Volatility#
The price target change is part of a broader adjustment where Citizens revised first-quarter 2026 estimates for 11 companies, including Ares Capital. The firm cited volatility during the quarter as the reason for these changes. Overall, the median estimate for alternative asset managers saw a decrease of 7%, while business development companies (BDCs) experienced a slight decline of 0.4%.
Earnings Estimates#
Citizens reported a median earnings per share reduction of 3% for both 2026 and 2027 for alternative asset managers. While estimates for business development companies largely remained stable, Citizens did reduce projections for several firms, including Apollo, Blackstone, and KKR, among others. Conversely, estimates for Blue Owl Debt Capital and Nuveen Churchill Direct Lending were increased.
Notable Developments in the Sector#
In related news, Capital Southwest Corporation recently announced its third-quarter 2025 earnings, which exceeded analyst expectations with earnings per share of $0.64, surpassing the forecast of $0.574. The company also reported revenue of $61.45 million, exceeding the expected $58.01 million. Additionally, Capital Southwest and Trinity Capital Inc. have formed a joint venture to invest in senior secured debt opportunities, each contributing $50 million for a 50% stake. This venture aims to enhance their investment strategies and expand their portfolios.