CFRA Upgrades Ares Management, L.P. (ARES) to Buy
CFRA analyst Kenneth Leon upgraded Ares Management, L.P. (NYSE: ARES) from Hold to Buy with a price target of $155.00 (from $140.00).
The analyst comments "ARES is a leading alternative asset manager in private credit. We raise our target by $15 to $155 on a forward P/E of 26.3x our 2025 EPS view, a premium to the 24.2x three-year historic average. We keep our 2024 EPS at $4.30 and increase 2025's by $0.50 to $5.90 (consensus $6.00). ARES posted Q2 2024 EPS of $0.99, $0.01 better than consensus. Management fees were +17% Y/Y, with total AUM at $447.2B (+18%) and fee paying AUM at $276B +14%. By segment, Credit was $323.1B (72% of total AUM), Real Assets $67.7B (15%), Private Equity $24.6B (6%), and Secondaries/Other 31.8B (7%). ARES raised $26.0B in Q2, with the largest inflows in Credit (77% of the total), Real Assets (16%), Secondaries (3%), and Other/Insurance (4%). Available capital (i.e., dry powder) was $70.8B and total deployments came in at $26B. In Q2, perpetual capital was $116.3B vs. $99.5B (+16.9%). Dispositions are expected in European funds later in 2024. We also like $83.2B of AUM not yet paying fees - some funds will begin to pay fees ahead."
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Shares of Ares Management, L.P. closed at $149.16 yesterday.