ARES Should I Buy
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Ares Management Corp (ARES) is not a strong buy at the moment for a beginner investor with a long-term focus. The stock is experiencing mixed signals from technical indicators, weak financial performance in the latest quarter, and negative sentiment in the private credit market. While there are some positive catalysts like recent investments and analyst ratings that suggest potential upside, the overall risks and lack of strong trading signals make it prudent to hold off on buying for now.
The technical indicators are mixed. The MACD is positive and expanding, indicating potential bullish momentum. However, the RSI is neutral at 43.397, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its pivot level of 117.504, with resistance at 126.722 and support at 108.286. This suggests limited upside potential in the short term.
Ares Management recently closed an $850 million investment in Convergint Technologies, reinforcing its leadership in the service-based systems integration sector. Analysts like Deutsche Bank and BofA have maintained Buy ratings, citing durable fee-related earnings growth and a strong track record in credit underwriting.
The private credit market is facing negative sentiment, with BlackRock and Blackstone experiencing challenges in liquidity management and redemption pressures. Ares Management's latest financials showed a significant drop in net income (-87.59% YoY) and EPS (-88.89% YoY), which raises concerns about profitability.
In Q4 2025, Ares Management reported a 27.68% YoY increase in revenue to $1.77 billion. However, net income dropped significantly by 87.59% YoY to $18.18 million, and EPS fell by 88.89% YoY to $0.08. This indicates strong revenue growth but severe profitability challenges.
Analysts have mixed views but lean towards a positive outlook. Barclays, RBC Capital, and TD Cowen lowered price targets but maintained Overweight or Buy ratings. Deutsche Bank upgraded the stock to Buy, citing a compelling entry point due to the recent selloff. However, UBS downgraded its rating to Neutral, reflecting caution amid private credit market concerns.
