Ares Capital: Transaction Activity Stayed Subdued Through 2Q, with Mgmt. Pointing to Recovery in Volumes and Improving Terms Ahead

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Ares Capital: Transaction Activity Stayed Subdued Through 2Q, with Mgmt. Pointing to Recovery in Volumes and Improving Terms Ahead

J P M O R G A N North America Equity Research

30 July 2026

Ares Capital

Transaction Activity Stayed Subdued Through 2Q, with Overweight

Mgmt. Pointing to Recovery in Volumes and Improving ARCC, ARCC US

Terms Ahead Price (29 Jul 26):$18.71

▲Price Target (Dec-27):$19.00

Prior (Dec-27):$18.50

ARCC reported core EPS of $0.47, flat sequentially, above JPMe of $0.45 and in

line with consensus of $0.47. NAV decreased 1.24% Q/Q to $19.35 (vs. JPMe of Consumer Finance

$19.60) and non-accruals deteriorated Q/Q to 2.4% at cost (from 2.1%). Richard Shane AC

(1-415) 315-6701

We increase our Dec 2027 price target to $19 (from $18.50) and reiterate OW, richard.b.shane@jpmorgan.com

given ARCC’s lengthy public track record through market cycles, flexible Hong Zhang

mandate, and position as one of the largest origination platforms in the (1-212) 622-6416

industry. ARCC is well positioned to capitalize on an improving investment hongliang.zhang@jpmorgan.com

J.P. Morgan Securities LLC

environment as spreads widen, leverage levels decline, and deal terms become

more attractive. ARCC also benefits from some of the lowest borrowing costs Quarterly Forecasts (FYE Dec)

across the industry, further supported this quarter by the launch of the first Adj. EPS ($)

commercial paper program in the BDC sector. Mgmt. noted deal activity picked up 2025A 2026E 2027E

as 2Q progressed, with transactions reviewed up over 25% Q/Q and June among Q1 0.50 0.47A 0.47

Q2 0.50 0.47A 0.47

the highest months for new transactions reviewed in the past two years, momentum Q3 0.50 0.47 0.48

mgmt said has continued into July. Mgmt. expects a pickup in volumes going Q4 0.50 0.47 0.49