On Thursday, CFRA analyst Kenneth Leon initiated coverage of Blue Owl Capital (NYSE: OWL) with a Buy rating and a price target of $27.00. Leon cited the company’s strong growth prospects and favorable valuation compared to historical averages and industry peers in the alternative investment sector. Current stock price stands at $20.40, with analysts’ price targets for Blue Owl ranging from $17 to $32, suggesting potential upside.
Leon’s valuation is based on a forward price-to-earnings (P/E) ratio of 30.0 times and a total enterprise value (TEV) to EBITDA multiple of 10.9 times. These figures are lower than Blue Owl’s three-year averages, which were 21.0 times for P/E and 17.1 times for TEV/EBITDA. Leon also pointed out that ARES Management (ARES), a close competitor, trades at a P/E of 28.3 times and a TEV/EBITDA of 20.0 times. InvestingPro analysis shows Blue Owl is trading at a P/E ratio of 102.7x and an EV/EBITDA of 17.83x, indicating premium valuations. For further details, investors can refer to the Pro Research Report available to InvestingPro subscribers.
Looking ahead, Leon remains optimistic about Blue Owl’s financial performance. He projects earnings of $0.90 per share in 2025 and $1.10 in 2026, with revenue expected to hit $2.8 billion in 2025 and $3.4 billion in 2026. He expects the company to achieve 20%-25% revenue growth, excluding any future acquisitions. This outlook is supported by Blue Owl’s impressive 32.56% revenue growth in the past 12 months, with a current revenue of $2.29 billion and a healthy gross profit margin of 59.91%.
Additionally, Leon forecasted growth in Blue Owl’s EBITDA, expecting it to reach $1.6 billion in 2025 and $1.95 billion in 2026. This forecast aligns with the company’s history of growing fee-related earnings by 25% annually since its public debut in May 2021. Blue Owl’s current EBITDA stands at $1.05 billion. InvestingPro’s analysis also highlights the company’s strong financial position with an overall “GREAT” score and a current ratio of 1.79, indicating solid liquidity.
Blue Owl’s performance in 2024 was strong, with assets under management (AUM) reaching $251.1 billion, a 52% year-over-year increase. Fee-paying AUM grew by 47% to $159.8 billion. The company also holds $22.6 billion in AUM not yet generating fees, expected to contribute over $300 million in management fees once deployed.
At the end of 2024, Blue Owl’s product mix consisted of Credit (54% of total AUM), GP Strategic Capital (26%), and Real Assets (20%). The company is also developing a new alternative credit product targeting the wealth and institutional markets.
In other news, Blue Owl Capital announced several key leadership changes. Senior Managing Director Sean Ward resigned, with the company confirming the departure was unrelated to its operations or financial controls. Rosamond Price was appointed Managing Director and Head of Private Wealth for Europe, the Middle East, and Africa, signaling a strategic focus on expanding the private wealth business in these regions. Blake Shorthouse also joined as Global Head of Family Capital, bringing valuable experience to strengthen relationships with family offices.
Barclays recently initiated coverage of Blue Owl with an Overweight rating and a price target of $29 per share, citing the company’s strong position in private credit and wealth management. Blue Owl’s leadership in asset classes like GP stakes and triple net lease also stands out. In a separate development, Wingspire Equipment Finance, backed by Blue Owl, provided a $30 million capital lease to an IT managed service provider, highlighting Blue Owl’s continued investment in digital infrastructure.
These strategic moves, including leadership changes and investments, reflect Blue Owl Capital’s ongoing efforts to solidify its position in key financial markets. Investors will be watching closely to see how these developments impact the company’s performance in the coming months.
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