Wells Fargo Downgrades Ares Capital to Hold, Sets $19 Target

Wells Fargo recently downgraded Ares Capital Corporation (NasdaqGS: ARCC) to a hold rating, setting a price target of $19. This change was announced on June 12, 2026, as part of Wells Fargo's updated analysis of the company's prospects.

Other Institutional Activity in Ares Capital

Morgan Stanley reduced its holdings in Ares Capital by 1,204,221 shares, ending with about 16.35 million shares valued at approximately $294.7 million. UBS Group AG, on the other hand, increased its stake by 3,114,640 shares, bringing its total to about 14.32 million shares worth $258 million. Meanwhile, Van Eck Associates Corp trimmed its position by 1,786,468 shares, holding around 10.89 million shares valued at $196.2 million. STRS Ohio made a notable addition, acquiring 10.5 million shares, all valued at about $189.2 million. Bank of America Corp also increased its stake by 1,259,230 shares, now holding approximately 9.14 million shares worth $164.6 million.

Ares Capital Corporation Stock Snapshot

Shares of Ares Capital Corporation are trading near $19.26. The company has a market capitalization of about $13.8 billion and a P/E ratio of 11.8, with a forward P/E of 10.0. It has a beta of 0.618, indicating lower volatility compared to the market. The stock's 52-week range is between $17.40 and $23.42, with a 50-day moving average of $18.79 and a 200-day moving average of $19.74. The company's current ratio stands at 0.376, with a quick ratio of 0.322 and a debt-to-equity ratio of 112.91.

Recent Earnings

Ares Capital reported revenue of $3.08 billion, indicating a growth rate of 4.2%. The company's net profit margin is 37.3%, with a return on equity of 8.3%. Earnings per share stand at $1.63. Investors are looking forward to the next earnings report, scheduled for April 28, 2026.

Dividend

Ares Capital Corporation offers an attractive dividend, with an annual rate of $1.92 per share, yielding 9.97%. The dividend payout ratio is 117.79%, reflecting the company's commitment to returning value to shareholders.

Insider Buying and Selling at Ares Capital Corporation

Several insiders have been active in buying shares of Ares Capital. On February 9, 2026, Jana Markowicz, the Chief Operating Officer, purchased 15,000 shares at $19.20 each. Scott Lem, the CFO and Treasurer, acquired 5,186 shares on February 6, 2026, at an average price of $19.29. Additionally, Mary Beth Henson bought 4,000 shares at $19.14 on February 5, 2026.

Analysts Set New Price Targets

On June 12, 2026, Wells Fargo downgraded Ares Capital to a hold rating with a $19 price target. RBC Capital maintained a buy rating with a $21 target on April 29, 2026, while Truist Securities and Citizens both maintained buy ratings with $22 targets. Keefe, Bruyette & Woods also kept a buy rating with a $21 target.

About Ares Capital Corporation

Ares Capital Corporation, based in Los Angeles, CA, is a business development company that focuses on providing growth capital and financing solutions to middle market companies. It specializes in various transactions, including acquisitions, recapitalizations, and leveraged buyouts. The company operates in sectors like sports, media, entertainment, and technology, among others. Led by CEO Mr. Kort Schnabel, Ares Capital has a strong presence in the financial services industry.

Bottom Line

Wells Fargo's recent downgrade of Ares Capital Corporation to a hold rating with a $19 target reflects a cautious outlook. Investors often track these analyst ratings for insights into potential stock movements. It's important to remember that these ratings and targets are based on past data and might not reflect future performance.