On Tuesday, RBC Capital Markets updated its outlook on Ares Management, L.P. (NYSE: NYSE:ARES), increasing the firm's price target to $150 from the previous $145, while reaffirming an Outperform rating on the stock. This adjustment follows the first quarter updates and incorporates the management's refined guidance regarding the net performance income of European-style waterfall funds.
The firm noted that Ares Management continues to witness strong growth in the retail and wealth management channel. Additionally, there is a sustained demand from limited partners (LPs) for private credit. Ares Management is recognized as a leading global platform for private credit, which represents approximately two-thirds of the company's assets under management (AUM).
RBC Capital Markets expressed confidence in the long-term growth potential of Ares Management, citing the company's asset-light business model as a key advantage. The firm anticipates significant growth in fee-related earnings (FRE) over the long term for Ares Management.
The statement from RBC Capital Markets highlighted the company's position within the private credit sector, which is viewed as an opportunity for multi-year secular growth. The firm's latest price target revision is reflective of these positive expectations and the company's strong performance trajectory.
InvestingPro Insights
Following the updated outlook from RBC Capital Markets on Ares Management, L.P. (NYSE: ARES), it's worth considering additional insights from InvestingPro to gain a broader understanding of the company's financial health and market position. Ares Management's market capitalization stands at a robust $42.18 billion, indicating a significant presence in the investment management sector. The company's P/E ratio is currently at 54.77, which, when viewed alongside a PEG ratio of 0.6, suggests that Ares may be trading at a low price relative to its near-term earnings growth potential.
InvestingPro Tips highlight that Ares Management has a history of maintaining and growing its dividend, with an impressive 11 consecutive years of payments and a recent 20.78% dividend growth. This consistency in dividend payments, coupled with the company's net income expected to grow this year, can be appealing to income-focused investors. Moreover, Ares Management's share price has seen a substantial uptick over the last six months, with a 31.69% return, and is trading near its 52-week high, which may interest growth-oriented investors.
For investors looking to delve deeper into Ares Management's performance and future prospects, additional InvestingPro Tips are available, providing a comprehensive analysis of the company. To explore these insights and make more informed investment decisions, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. There are 14 additional tips listed on InvestingPro that could further guide investment strategies concerning Ares Management.
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