J.P. Morgan Initiates Ares Capital at Overweight (ARCC)
J.P. Morgan is out with its report on Ares Capital (NASDAQ: ARCC), initiating coverage at Overweight with a $19 price target.
In a note to clients, J.P. Morgan writes, "We view Ares' opportunistic purchase of Allied Capital near the bottom of the market, as a transformative event that will generate substantial short and long-term benefits. Based upon a combination of price appreciation and NTM dividend of $1.45, we are projecting a total return of 22% through 2011. While Ares was not immune to the crisis, the company's disciplined investment and funding strategies were validated in the past 3 years. Non-accruals peaked at 6.2%, one of the lowest ratios in the peer group and the company maintained a $0.35 quarterly dividend (reduced from a peak of $0.42)."
At the time of posting, shares of ARCC were trading at $16.99, up 1.19% from Monday's close.
