Deutsche Bank Downgrades Rating, Blue Owl Capital Stock Price Drops

Investing.com – Blue Owl Capital (NYSE:OWL) stock fell 1% on Tuesday, continuing its recent decline. Previously, Deutsche Bank downgraded the stock from Buy to Hold and lowered the target price from $15 to $10.

The stock closed Monday at $10.44, down 31% over the past month. The new target price is slightly below the current trading level.

Deutsche Bank analyst Brian Bedell lowered his forecast for alternative asset management companies, citing a more challenging environment for retail credit product net inflows recently. The analyst noted that investor anxiety is high, partly due to ongoing news headlines in the sector, which could lead to increased redemption requests and reduced new sales for many retail credit products.

Bedell expects these conditions to persist for at least the next one to two quarters. Any improvement in capital flows will depend on a reduction in negative news, no new defaults in the private credit sector, and an improvement in investor risk appetite.

According to the analyst, Blue Owl faces greater exposure to these adverse factors than its peers because its retail private credit tools contribute a higher proportion to total fee-earning assets. Bedell also anticipates that, given recent news headlines, Blue Owl’s redemption requests may rise more significantly in the near term.

The downgrade reflects a revised outlook for slower long-term fee-related revenue growth. Among other alternative asset managers, Deutsche Bank made substantial negative revisions for Blackstone, Ares Management, and TPG, while revisions for Carlyle, Apollo Global Management, and Brookfield Asset Management were relatively moderate.

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