Analyst Derek Hewett from Bank of America Securities maintained a Buy rating on Blue Owl Capital and keeping the price target at $15.50.
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Derek Hewett’s rating is based on a combination of factors that highlight the potential for Blue Owl Capital’s growth and stability. Despite a slight decline in adjusted core EPS and GAAP EPS due to higher interest expenses and portfolio depreciation, the company’s strategic merger with OBDC II is expected to enhance its loan portfolio significantly, reaching a total of $19 billion. This merger is structured to potentially provide NAV accretion, and with a high overlap in portfolios, execution risk is minimized.
Additionally, Blue Owl Capital’s leverage remains stable within its target range, and the company has a robust liquidity position of $3.2 billion. Although there was a slight decline in NAV per share and portfolio yield, the dividend yield remains attractive at 10.5%. The company’s board-approved $200 million buyback further underscores confidence in its financial health. These elements collectively support the Buy rating, indicating a positive outlook for Blue Owl Capital’s stock performance.
Hewett covers the Financial sector, focusing on stocks such as Blue Owl Capital, New Mountain Finance, and Barings BDC. According to TipRanks, Hewett has an average return of 4.4% and a 54.35% success rate on recommended stocks.
In another report released today, Citizens JMP also maintained a Buy rating on the stock with a $15.00 price target.