Should You Buy Ares Capital Corp (ARCC) Today? Analysis, Price Targets, and 2026 Outlook.
Conclusion
Buy
Latest Price
20.190
1 Day change
-0.49%
52 Week Range
23.410
Analysis Updated At
2026/01/28
Buy now for a beginner long-term, income-focused investor with $50k–$100k. ARCC is offering a ~9%+ dividend yield and the recent news flow is broadly supportive of the income thesis (portfolio growth and access to funding). Near-term technicals are weak (bearish MACD), but price is sitting close to support and RSI is low, which makes the current level acceptable for an immediate long-term entry.
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Technical Analysis
Pre-market price ~20.33 (+0.20%) is below the pivot (20.7) and very near S1 support (20.356); next support is S2 (20.143). Momentum is still bearish: MACD histogram is negative (-0.0365) and expanding lower, implying the down-move hasn’t fully stabilized. RSI_6 at ~33.5 is low (near oversold territory), which often coincides with a better long-term entry zone even if the short-term trend remains soft. Converging moving averages suggest the stock may be transitioning into consolidation rather than a strong uptrend.
Options Data
Bearish
Open Interest Put-Call Ratio
Bearish
Option Volume Put-Call Ratio
Options positioning leans bearish/defensive: put open interest (111,078) exceeds call OI (69,848) and put-call ratios are elevated. Today’s options activity is extremely high versus the 30-day average (volume ~210% of avg; OI ~111% of avg), suggesting heightened attention/hedging. Implied volatility is high (30D IV ~28.78) and IV percentile is very elevated (93.2), consistent with the market pricing in event risk (notably the upcoming earnings on 2026-02-04 pre-market) and/or increased downside protection demand.
Technical Summary
Sell
8
Buy
6
Positive Catalysts
High dividend yield (~9%+) remains a strong draw for long-term income investors. News notes portfolio value growth and the company raising over $1B in new debt capital, supporting its ability to fund lending activity. ARCC’s scale and positioning in direct lending/middle-market financing is repeatedly highlighted as a long-run tailwind. Upcoming earnings (2026-02-04 pre-market; EPS est. 0.50) can act as a positive catalyst if credit quality and net investment income trends hold up.
Neutral/Negative Catalysts
Near-term technical momentum is bearish (MACD negative and worsening). Options sentiment is defensive (high put-call ratios and very high IV percentile), implying the market is hedging downside into the next catalyst window. News explicitly flags macro/economic risk that could pressure credit performance and dividend sustainability—key risks for a high-yield BDC. If earnings disappoint (or credit marks/portfolio yield trends worsen), the stock could re-test the lower support area (around ~20.14).
Financial Performance
Latest reported quarter: 2025/Q3. Revenue rose to $920M (+13.86% YoY), indicating solid top-line momentum. Net income increased to $404M (+2.54% YoY), but EPS fell to $0.57 (-8.06% YoY), suggesting per-share profitability is lagging (potentially from share count changes, higher costs, or portfolio mix). Gross margin improved to 77.28% (+1.86% YoY), a constructive sign on operating/portfolio economics overall.
Growth
Profitability
Efficiency
Analyst Ratings and Price Target Trends
No explicit analyst rating/price target change data was provided in the dataset, so recent upgrades/downgrades can’t be confirmed here. Based on the provided news framing, the typical Wall Street-style bull case is: durable 9%+ yield, scale in direct lending, and portfolio growth/funding access. The bear case emphasized is: economic/credit-cycle risk and the possibility of dividend pressure if portfolio yields fall or credit losses rise. Politician/congress trading: no recent congress trading data available; hedge funds and insiders are reported as neutral with no significant recent trends.
Wall Street analysts forecast ARCC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ARCC is 22.5 USD with a low forecast of 21 USD and a high forecast of 24 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
7 Analyst Rating
Wall Street analysts forecast ARCC stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ARCC is 22.5 USD with a low forecast of 21 USD and a high forecast of 24 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Buy
1 Hold
0 Sell
Strong Buy
Current: 20.290
Low
21
Averages
22.5
High
24
Current: 20.290
Low
21
Averages
22.5
High
24
RBC Capital
Outperform
downgrade
$24 -> $23
AI Analysis
2025-10-29
Reason
RBC Capital
Price Target
$24 -> $23
AI Analysis
2025-10-29
downgrade
Outperform
Reason
RBC Capital lowered the firm's price target on Ares Capital to $23 from $24 but keeps an Outperform rating on the shares after its Q3 results. The company's still solid credit performance in Q3, coupled with the management's confidence in maintaining common dividends at current levels for the "foreseeable" future despite a down rate outlook, go a long way to address the two main concerns across the BDC space, the analyst tells investors in a research note.
Keefe Bruyette
Paul Johnson
Outperform -> Outperform
downgrade
$23 -> $22
2025-10-29
Reason
Keefe Bruyette
Paul Johnson
Price Target
$23 -> $22
2025-10-29
downgrade
Outperform -> Outperform
Reason
Keefe Bruyette analyst Paul Johnson lowered the firm's price target on Ares Capital to $22 from $23 and keeps an Outperform rating on the shares.
Unlock Full Analyst Thesis， Get the complete breakdown of rating reason for ARCC
