Ares Management, L.P. (ARES) PT Raised to $139 at Jefferies

Jefferies analyst Gerald O'Hara raised the price target on Ares Management, L.P. (NYSE: ARES) to $139.00 (from $127.00) while maintaining a Hold rating.

The analyst commented: "Our 2Q24 realized income/shr est decreases to $0.95 from $0.97, and FY24 decreases to $4.24 vs $4.37 prev, due to a reduction in net perf fees and a decrease in inv income. We model 2Q24 FRE of $320M ($325M prev), and we expect net realized performance fees in 2Q24 of $35M ($37M prev) vs $10M last qtr, Our 2Q24 FRE margin est of 44.3% (43.6% prev) compares to 42.1% in 1Q24, leaving FY24 at 42.2% (FY23:40.7%), in line with the investor day comments of 0-150bps guidance of margin expansion each year. Additionally, we reflect ARES' Jun equity issue for $356m (2.65m shares at $134.07 ea). Fundraising for '24 is expected to be below '23's +$74.5B with a lack of flagship funds in the market. In May, ARES hosted its '24 investor day where it laid out its strategy to '28, most notably, earnings growth of FRE and RI of +16-20% and +20-25% CAGR."

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