Overview
Raymond James has reaffirmed its Strong Buy recommendation and $20.00 price target on Blue Owl Capital (NYSE: OWL), declaring the company an attractive purchase at an implied valuation of 12.9x 2026 consensus EPS. The firm characterized the current price as a "compelling buying opportunity" while third-party data from InvestingPro indicates that Blue Owl appears undervalued on a Fair Value basis despite carrying a headline P/E ratio of 125.2.
Recent share movement and market context
Shares of Blue Owl fell sharply in the most recent week of trading for private credit managers, with the stock declining by approximately 8% following media coverage that highlighted potential pressures on software companies tied to developments in artificial intelligence. Raymond James judges the direct risk to Blue Owl from those dynamics as low. InvestingPro figures show the stock has dropped 44.42% over the trailing 12 months and fell 6.71% in the last week alone.
Income profile and dividend history
Blue Owl pays a common stock dividend of roughly $0.225 per quarter, equivalent to $0.90 annually, which produces an attractive yield near 7.2% according to the Raymond James note. InvestingPro corroborates that yield at 7.19% and further notes that Blue Owl has increased its dividend for five consecutive years, registering 25% dividend growth in the most recent twelve-month period.
Asset mix and credit exposure
The firms exposure to software and technology assets is relatively modest within the portfolio, comprising roughly 8% of total assets under management. For loans to software companies, the average loan-to-value ratio sits at about 30%, metrics that Raymond James used to support its view that risk from the recent software-focused headlines is limited.
Operating performance and forecasts
Blue Owl reported a fee-related earnings margin of 58.3% in 2025, above its prior guidance range of 57-58%, and the company has increased its 2026 target to 58.5%. Management is projecting fee-related earnings growth of 20% per year through 2029, backed by distribution capabilities and investment performance across the firm's product set. Supporting this growth narrative, InvestingPro data records 25.04% revenue growth over the last twelve months.
Fundraising and flows
During the fourth-quarter 2025 earnings discussion, Blue Owl management reported stabilization in daily flows for wealth products and indicated the company could match its 2025 total fundraising pace in 2026. For the full year 2025, Blue Owl announced new capital commitments totaling $56.3 billion, which included $17.3 billion raised in private wealth equity and $24.7 billion from institutional equity fundraising. The company has a market capitalization of $19.53 billion.
Earnings beat and contrasting analyst view
Blue Owls fourth-quarter 2025 results topped expectations. The company posted earnings per share of $0.24 versus a consensus forecast of $0.23, and reported revenue of $755.6 million compared with a projected $718.37 million. Those outcomes represented 4.35% and 5.18% beats over analyst estimates, respectively.
Despite the quarterly outperformance, Goldman Sachs revised its price target on Blue Owl from $16.25 to $14.00 while keeping a Neutral rating. Goldman noted that its fee-related earnings estimates for 2026 through 2028 are largely unchanged and projects roughly 12% year-over-year growth in total fee-related revenue, a pace the bank observed may fall short of the company's internal targets.
What this means for investors
Analysts differ on the near-term valuation case for Blue Owl. Raymond James emphasizes a buying opportunity based on mid-2020s earnings multiples and the firm's dividend yield, while other firms, such as Goldman Sachs, signal more tempered growth assumptions and have trimmed their price targets even as they preserve neutral stances. The company's recent fundraising success, dividend track record, and fee-related earnings margin are central data points driving the discussion among market participants.
Summary of key figures and developments
- Raymond James: Strong Buy, $20.00 price target, "compelling buying opportunity" at 12.9x 2026 consensus EPS.
- InvestingPro: Fair Value analysis indicates undervaluation despite P/E of 125.2; 44.42% decline over 12 months; 6.71% decline in the past week.
- Dividend: $0.225 quarterly ($0.90 annually) - yield ~7.19%-7.2%; five consecutive years of dividend increases; 25% dividend growth in the last 12 months.
- Exposure: Software/technology ~8% of AUM; average loan-to-value on software loans ~30%.
- Operating metrics: 58.3% fee-related earnings margin in 2025 (above 57-58% guidance); 2026 target raised to 58.5%; management projects 20% annual fee-related earnings growth through 2029; 25.04% revenue growth in the last 12 months.
- Fundraising: $56.3 billion in new commitments for 2025, including $17.3 billion private wealth equity and $24.7 billion institutional equity.
- Earnings: Q4 2025 EPS $0.24 vs $0.23 forecast (4.35% surprise); revenue $755.6 million vs $718.37 million forecast (5.18% surprise).
- Market cap: $19.53 billion.
- Goldman Sachs: Price target reduced from $16.25 to $14.00; Neutral rating maintained; projects ~12% YoY total fee-related revenue growth.