Raymond James Initiates Coverage on Blue Owl Capital with Neutral Rating

Raymond James has initiated coverage on Blue Owl Capital with a "Market Perform" rating, indicating a neutral perspective on the stock. The firm did not provide a specific price target. Analysts forecast an average one-year price target of $23.54, implying an 18.08% upside from the current price of $19.94. The estimated GF Value for Blue Owl Capital is $27.55, suggesting a 38.2% upside from the current price.

Raymond James has initiated coverage on Blue Owl Capital Inc. (NYSE: OWL), a $32.3 billion market cap alternative asset manager, with a Market Perform rating. The investment firm cited Blue Owl’s target of achieving a fee-related earnings compound annual growth rate exceeding 20% through 2029, while noting the absence of anticipated near-term catalysts for the stock.

Raymond James considers the stock fairly valued at a 21 times next-twelve-months price-to-earnings ratio, compared to its three-year average of 19.1x and in line with alternative asset manager peers. The firm highlighted Blue Owl’s strong position in the private wealth channel, which contributes more than one-third of its capital and supports permanent capital that generated 91% of management fees in 2024. The company offers an attractive 4.5% dividend yield and maintains strong liquidity with a current ratio of 2.4.

Blue Owl’s direct lending business, representing 37% of assets under management, offers high fee rates and solid AUM growth. The recent Atalaya acquisition will increase the company’s presence in alternative credit and asset-based finance. The company has demonstrated strong execution with revenue growth of 33% over the last twelve months, earning an overall GOOD financial health rating from InvestingPro, which offers 8 additional key insights about Blue Owl’s valuation and growth prospects.

In other recent news, Blue Owl Capital Inc. reported mixed financial results for the first quarter of 2025. The company missed earnings per share (EPS) expectations, posting $0.17 against a forecast of $0.19, but exceeded revenue projections with $683.49 million compared to the anticipated $628.65 million. In another development, Blue Owl Capital, Chirisa Technology Parks, and PowerHouse Data Centers closed a significant $750 million deal as part of their joint venture aimed at developing AI and high-performance computing data centers. This partnership, which began in August 2024, marks a critical milestone with construction underway at a 350-acre campus in Chesterfield, Virginia.

Additionally, Blue Owl Capital is involved in a $15 billion AI data center expansion in partnership with Crusoe and Primary Digital Infrastructure. This project in Abilene, Texas, is set to add six new buildings to the existing two under construction, with the first phase expected to be operational in the first half of 2025. Furthermore, Blue Owl Capital announced the final closure of its Blue Owl Digital Infrastructure Fund III at $7 billion, surpassing its initial $4 billion target. The fund aims to invest in data centers and connectivity assets to meet the growing demands of the technology sector.

Analysts forecast an average one-year price target of $23.54, implying an 18.08% upside from the current price of $19.94. The estimated GF Value for Blue Owl Capital is $27.55, suggesting a 38.2% upside from the current price.

References:
[1] https://www.investing.com/news/analyst-ratings/raymond-james-initiates-blue-owl-capital-stock-with-market-perform-rating-93CH-4154963
[2] https://za.investing.com/news/analyst-ratings/raymond-james-initiates-blue-owl-capital-stock-with-market-perform-rating-93CH-3806593