ARES Stock Faces Pressure as Analysts Maintain Moderate Buy Despite Underperformance

Ares Management Corporation (ARES) shares have struggled in 2026 as the alternative asset manager faces margin pressure and revenue headwinds, yet Wall Street analysts are maintaining a constructive stance on the stock with price targets implying meaningful upside from current levels.

Market Context

ARES has notably underperformed both the broader market and financial sector peers over multiple time frames. The stock has declined 20.8% over the past year while the S&P 500 Index ($SPX) has rallied nearly 20.5%. On a year-to-date basis in 2026, ARES is down 12.6%, compared to the SPX's 12.1% gain. The underperformance extends to sector comparisons as well—the State Street Financial Select Sector SPDR ETF (XLF) has gained about 7.4% over the past year and 5.1% YTD, significantly outpacing ARES.

Analysis

The stock's struggles stem from operating margin contraction on a year-over-year basis driven by higher general and administrative expenses. According to Barchart, these costs were partly elevated due to the company's biennial global meeting while also reflecting continued investment in technology, distribution, and front-office capacity—moves management likely views as necessary for long-term growth but which have weighed on near-term profitability.

Following Ares Management's Q2 earnings report on July 31, shares closed up more than 8% in the following trading session. The adjusted EPS of $1.29 met Wall Street expectations exactly, providing a floor for the stock after its recent weakness. However, revenue of $1.26 billion missed consensus forecasts of $1.32 billion, suggesting top-line challenges persist.

The analyst community remains generally constructive despite these headwinds. Among 20 analysts covering ARES, the consensus recommendation is a "Moderate Buy" based on 11 "Strong Buy" ratings, two "Moderate Buys," and seven "Holds." This configuration has remained relatively stable over the past three months.

Key Numbers

- Market capitalization: $46.7 billion

- Q2 adjusted EPS: $1.29 (met Wall Street expectations)

- Q2 revenue: $1.26 billion (missed forecasts of $1.32 billion)

- FY2026 expected EPS: $5.94 on a diluted basis, representing 24.8% growth year-over-year

- TD Cowen price target: $163 (Buy rating, implied upside of 15.4%)

- Mean price target: $150.80 (implied premium of 6.8%)

- Street-high price target: $205 (potential upside of 45.1%)

What to Watch

The next earnings report will be critical for ARES as investors assess whether margin pressures are transitory or structural. The company's earnings surprise history is mixed—Ares Management beat or matched consensus estimates in two of the last four quarters while missing forecasts on two other occasions, suggesting volatility around reporting periods.

For traders monitoring levels, TD Cowen's $163 target implies 15.4% upside from current prices, while the Street-high of $205 represents a more ambitious 45.1% premium for bulls to consider. The mean target of $150.80 offers a more conservative 6.8% upside scenario. These ranges reflect uncertainty about whether ARES can reverse its underperformance through improved operational execution or if structural headwinds will persist.