Goldman Sachs has cut its price target on Blue Owl Capital to $14.00 from $16.25 but retained a Neutral rating on the shares, according to the bank’s latest coverage. Blue Owl is trading at $11.63, well below its 52-week high of $25.89, and InvestingPro data show the stock has fallen more than 50% over the past year.
Goldman’s reassessment leaned on Blue Owl’s fourth-quarter 2025 earnings disclosure. The firm left its fee-related earnings, or FRE, estimates for 2026 through 2028 essentially unchanged, while forecasting about 12% total fee-related revenue growth on a year-over-year basis. Goldman noted that this pace may fall short of the company’s own management targets, even as Blue Owl achieved strong revenue growth of 25% over the last twelve months, per InvestingPro data.
Blue Owl concluded 2025 with $28 billion of assets under management that are not yet generating fees. Goldman described that pool as translating into approximately 13% embedded management fee growth year-over-year. Management is targeting modest FRE margin expansion to roughly 58.5% in 2026, which the bank interprets as implying mid-teens revenue growth for the year.
Operational metrics reported alongside these forecasts include a 54.46% gross profit margin and a substantial dividend yield of 7.74%. Blue Owl has increased its dividend for five consecutive years.
On distributable earnings, Goldman projects 10% total growth in 2026. The bank identifies several drivers supporting that outlook: continued deployment of capital, fundraising in wealth channels outside of credit products, and scale-up of newer strategies. According to Goldman, Blue Owl’s fundraising momentum is broad-based across both institutional clients and wealth channels.
Valuation remains a key tension in Goldman’s view. The stock presently trades at a price-to-earnings ratio of 101.7 and a PEG ratio of 3.0, signaling a premium valuation relative to the projected growth profile. Goldman adjusted its per-share earnings estimates modestly to $0.91 for 2026, $1.06 for 2027, and $1.19 for 2028; these figures are largely unchanged from the bank’s prior forecasts of $0.91, $1.05, and $1.19, and sit below consensus expectations.
InvestingPro data indicate six analysts have recently lowered their earnings estimates for Blue Owl, although the company is still expected to be profitable this year.
Separately, Blue Owl reported fourth-quarter 2025 results that exceeded expectations on both the bottom and top lines. The firm posted diluted earnings per share of $0.24, versus a $0.23 forecast, representing a 4.35% surprise. Revenue for the quarter came in at $755.6 million, topping the $718.37 million estimate by 5.18%.
Despite those beats, the stock experienced a decline in pre-market trading following the release. Available reports did not provide detailed summaries of analyst reactions or subsequent intraday stock movements.
Contextual note - The contrast between Blue Owl’s recent operating performance and an elevated valuation multiple underlies Goldman’s cautious stance. While the firm identifies clear growth levers for distributable earnings, the expected pace of fee-related revenue expansion and premium market multiples factor into the Neutral rating and the reduced price target.
Investor considerations - Shareholders and prospective buyers will likely weigh the company’s embedded fee growth, dividend yield, and fundraising breadth against its high P/E and PEG metrics when assessing relative value and risk.