Ares Commercial Real Estate (ACRE) Shares Soar 3.04% on UBS Price Target Hike

Ares Commercial Real Estate (ACRE) shares surged 3.04% intraday, marking the highest level since February 2025, with a 2.23% increase for the day and a 4-day winning streak, accumulating an 8.14% gain over the past four days.

The strategy of buying ACRE shares after they reached a recent high and holding for 1 week resulted in poor performance over the past five years. The strategy yielded a return of -21.08%, significantly underperforming the benchmark return of 56.28%. The excess return was -77.36%, and the CAGR was -9.32%, indicating a substantial decline in value. The strategy also had a high maximum drawdown of -46.84% and a Sharpe ratio of -0.28, suggesting significant risk and negative returns.

Analysts' ratings have played a significant role in influencing investor sentiment towards Ares Commercial Real Estate. UBS Group recently raised its price target for the company from $3.75 to $5.00, maintaining a "neutral" rating. This adjustment could potentially boost investor confidence and positively impact the stock price.

Despite the positive analyst rating, the overall consensus among Wall Street analysts remains bearish. Over the past 12 months, six analysts have given the stock a "Reduce" rating, indicating a generally negative outlook. This sentiment could weigh on the stock price, making investors cautious about their investments in Ares Commercial Real Estate.

Financial performance is another critical factor affecting the stock price. Ares Commercial Real Estate reported a substantial 50.47% decline in revenue for the quarter ending March 31, 2025. This significant drop in revenue is likely to have a negative impact on the stock price, as investors may become concerned about the company's financial health and future prospects.

Institutional investment activity also influences the stock price. Bank of America Corp DE increased its stake in Ares Commercial Real Estate by 49.2% during the fourth quarter. This increased investment by a major financial institution could signal confidence in the company's future performance, potentially driving up the stock price.