UPDATE: Bank of America Lowers PT on Ares Commercial Estate Following Transformational Offering

In a report published Monday, Bank of America analyst Kenneth Bruce reiterated a Buy rating on Ares Commercial Estate ACRE, but lowered the price target from $19.00 to $15.00.

In the report, Bank of America noted, “Ares Commercial Real Estate issued 18M shares of common equity at $13.50, allowing it to pursue new investment opportunities and adding significant scale to its business. Given the size of the equity issuance, which tripled ACRE's market capitalization, the company has effectively completed a re-IPO. The added scale should increase ACRE's market relevance and allow it to close on an attractive pipeline of new investments, including the previously announced Alliant merger. We believe this issuance puts ACRE in a better position to benefit from the secular shift from a bank-centric commercial mortgage market to one where specialist lenders control a more meaningful market share. Maintain Buy.”

Ares Commercial Real Estate closed on Friday at $13.08.