JPMorgan Resumes Blue Owl Capital (OWL) at Neutral

JPMorgan analyst Kenneth Worthington resumes coverage on Blue Owl Capital (NYSE: OWL) with a Neutral rating and a price target of $18.50.

The analyst comments "Following a period of restriction, we are moving to a Neutral rating and a December 2024 price target of $18.50 (Neutral rating and December 2024 price target of $19.00 prior to restriction) from a Not Rated designation. Considering that OWL reported its 1Q24 earnings during our period of restriction and hence we did not publish a related review and model update, we note that the latest earnings release was mixed. Blue Owl reported 1Q24 DE/sh of $0.17, beating both our estimate and the Bloomberg consensus of $0.16 by 1 cent. While sentiment was somewhat weighed down by a fundraising mix and a substantial delta between gross and net deployment (note OWL was not unique in being impacted by this dynamic), management struck a positive note, pointing to the real estate segment’s differentiation (as corroborated by a healthy +2.1% performance in the quarter), healthy credit metrics, and ongoing acceleration of private wealth flows. Management also provided incremental building blocks / progress made on achieving the much discussed $1.00 / sh of distributions in 2025 target. Finally, we remind the reader that OWL has been active on the M&A front, completing acquisitions of KAM (insurance) and Prima (liquid RE / ABS). We see these deals as synergistic. We did not make particularly substantial changes to our model on the back of 1Q24 results, and both our FY2024 and FY2025 estimates shed 3 cents each (from $0.86 to $0.83 and from $1.06 to $1.03 respectively. These changes were largely fundraising related. Our overall views of the story remain largely unchanged, as does the 25x multiple we apply to OWL’s 2025E earnings."

For an analyst ratings summary and ratings history on Blue Owl Capital click here. For more ratings news on Blue Owl Capital click here.

Shares of Blue Owl Capital closed at $17.64 yesterday.

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