UPDATE: Bank of America Downgrades Oaktree Capital Group LLC to Neutral, Lowers PT on Near-Term Cyclicality

In a report published Monday, Bank of America analyst Michael Carrier downgraded the rating on Oaktree Capital Group LLC OAK from Buy to Neutral, and lowered the price target from $62.00 to $58.00. In the report, Bank of America noted, “We are downgrading Oaktree from Buy to Neutral given expectations of lower DE (distributable earnings) and distributions, due to the timing of the fund cycle. While we view Oaktree as a premiere alternative asset manager that is well positioned over the long run, given the more subdued near term outlook (cyclically driven) and our below Street estimates, we see limited upside. Oaktree has posted robust distributions over the past year given the seasoning and strong performance of its large distressed fund (Opps VIIb), but given some expected moderation ahead in VIIb as the fund continues to wind down and some expected time lag before other funds become eligible to start paying out incentive fees, we expect the level of distributions/dividends to moderate in the near term.” Oaktree Capital Group LLC closed on Friday at $53.53.