On Thursday, TD Cowen maintained a Buy rating on shares of Ares Management, L.P. (NYSE:ARES), with a price target of $168.00. The firm's stance comes in light of a recent equity raise by Ares Management. The company announced after the market closed on Wednesday that it aims to generate approximately $400 million, which includes a $50 million greenshoe option. This move is anticipated to fuel the company's growth through new ventures or acquisitions.
Reflecting on the insights from Ares Management's Investor Day on May 22, 2024, the focus of the company is expected to be on expanding its retail offerings, direct lending, credit operations, and its non-U.S. presence, likely through deal-driven strategies. The firm's analysis suggests that the growth could be particularly concentrated in areas requiring deal-making expertise.
The firm commends Ares Management's track record of swiftly executing deals in close proximity to their capital raises. This capability is seen as a positive sign for the company's future performance and is a contributing factor to the reaffirmed Buy rating.
Ares Management's strategic moves are aligned with the company's goals to enhance its offerings and expand its market reach. The equity raise is viewed as a proactive step towards achieving these objectives and is supported by the company's historical proficiency in deal execution.
The analyst's comments underline a belief in Ares Management's potential for accelerated growth, leveraging the newly raised capital. With a solid execution track record, the firm's outlook on Ares Management remains positive, as indicated by the reiterated Buy rating and $168.00 price target.
In other recent news, Ares Management has been subject to a series of analyst adjustments and strategic developments. Deutsche Bank recently revised its rating for Ares Management to Hold from Buy due to a correction in the share count used in their valuation model. This adjustment, which does not reflect any operational changes in the company, resulted in a new price target of $132.
In a bid to fund general corporate activities, Ares Management announced a public offering of 2,650,000 shares of its Class A common stock. This move comes on the heels of the firm's latest performance report, which showed the company managing approximately $428 billion in assets.
Analyst firms such as BofA Securities and TD Cowen have maintained a positive outlook on Ares Management. BofA Securities reiterated a Buy rating, citing confidence in the company's potential for robust five-year organic growth. TD Cowen also sustained its Buy rating and set a price target of $171, highlighting potential in areas like retail growth and wealth management expansion.
InvestingPro Insights
As Ares Management (NYSE:ARES) takes proactive steps to expand its operations, the latest data from InvestingPro shows a company with a complex financial profile. Ares has demonstrated a commitment to shareholder returns, raising its dividend for the past 4 years and maintaining dividend payments for 11 consecutive years, signaling confidence in its financial stability and future prospects. Moreover, analysts have a positive outlook on the company's profitability, predicting Ares will be profitable this year and noting its profitability over the last twelve months.
InvestingPro Data indicates a market capitalization of $25.92 billion, with a P/E ratio standing at 57.46, pointing towards a high valuation relative to earnings. However, the company's PEG ratio of 0.62 suggests a more favorable growth trajectory when factoring in expected earnings growth. Additionally, the company's revenue has grown by 11.8% over the last twelve months as of Q1 2024, which aligns with the company's strategic focus on expansion and deal-making expertise.
For those seeking a deeper dive into Ares Management's financial health and future outlook, there are additional InvestingPro Tips available. These include insights on the company's short-term obligations versus liquid assets, and its performance relative to earnings multiples. Interested readers can find more detailed analysis and tips by visiting the dedicated InvestingPro page for Ares Management at https://www.investing.com/pro/ARES. Moreover, users can benefit from an exclusive offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to numerous other InvestingPro Tips to guide investment decisions.
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