Goldman Sachs has adjusted its valuation of Ares Management L.P. (NYSE: ARES), moving its price target down to $165 from $189 while keeping a Buy rating on the stock. The firm trimmed its 2025-2028 earnings-per-share (EPS) assumptions by about 3% to reflect a modestly lower starting level for management fees, a marginally slower pace of PRE acceleration in the near term, and Ares Management's revised tax-rate guidance of 11% to 15%.
The stock has experienced a substantial recent decline. According to InvestingPro data, Ares has fallen 18.57% over the past week and is trading at $121.87. InvestingPro’s Fair Value assessment continues to indicate the shares may be undervalued despite the recent drawdown.
Goldman Sachs reduced its management-fee projections by 1%. The bank attributed that downgrade largely to an underperformance in Ares’ Credit segment during the quarter. Despite that adjustment, Goldman left its fee-related earnings (FRE) estimates broadly intact.
On margins, Ares management reiterated expectations for the upper end of a 0-150 basis-point range in 2026. Goldman Sachs continues to anticipate upside to those margin targets over the coming years and positions its margin expectations at roughly 100 basis points above Visible Alpha consensus by 2028.
Goldman revised its FRE-per-share estimates to $6.22 for 2026, $7.63 for 2027 and $9.21 for 2028, down from prior forecasts of $6.41, $7.92 and $9.38, respectively. Goldman notes that Ares is trading at approximately 22 times its 2027 FRE estimates. With an expected compounding of FRE per share and dividends at about 20%, the firm characterizes the recent price decline as a favorable entry point for prospective investors.
InvestingPro data shows Ares currently yields 3.68% in dividends and has increased its dividend for six consecutive years. InvestingPro also reports that seven analysts have recently lowered their earnings expectations for Ares for the upcoming period.
In company reporting, Ares Management’s fourth-quarter 2025 results missed Street expectations. The company reported EPS of $1.45 versus the anticipated $1.70 and recorded revenue of $1.5 billion compared with an expected $1.52 billion. The earnings release did not include material announcements regarding mergers or acquisitions.
Following the earnings release, analyst firms had not publicly changed their ratings at the time of the report. Market participants remain attentive to further developments at Ares as the firm integrates its updated guidance and addresses the credit-segment shortfall.
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