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Why Is Blue Owl Capital Corporation (OBDC) Up 2.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Blue Owl Capital Corporation (OBDC - Free Report) . Shares have added about 2.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blue Owl Capital Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Blue Owl Capital Beats on Q2 Earnings, Plans OBDE Merger
Blue Owl Capital reported second-quarter 2024 earnings per share (EPS) of 48 cents, which beat the Zacks Consensus Estimate by a penny. The bottom line remained flat year over year.
The total investment income of Blue Owl Capital amounted to $396.8 million, which increased 0.6% year over year. Also, the top line beat the Zacks Consensus Estimate by 2%.
Blue Owl Capital’s better-than-expected second-quarter results were supported by growing investment income, strong portfolio performance, new investment commitments and flat expenses.
Q2 Update
Net investment income increased 1.3% year over year to $189.1 million. Also, the metric beat our estimate by 3.3%. Total new investment commitments (net of sell downs) were $3.3 billion across 25 new portfolio companies and 24 existing ones.
Blue Owl Capital ended the second quarter with investments in 212 portfolio companies, backed with an aggregate fair value of $13.3 billion. Based on the fair value, the average investment size in each portfolio company was $62.9 million as of Jun 30, 2024.
Total expenses remained flat from the year-ago period at $205.2 million in the second quarter. The metric was higher than our estimate of $200.8 million, primarily due to higher interest expenses, management fees and performance-based incentive fees.
The company recorded a net income of $122.2 million in the second quarter compared with $195.6 million in the year-ago period.
Financial Update (as of Jun 30, 2024)
Blue Owl Capital exited the second quarter with cash and restricted cash of $380 million, which declined from $658.7 million as of Dec 31, 2023. Total assets of $13.9 billion rose from $13.5 billion at 2023-end.
Debt was $7.4 billion, up from $7.1 billion at 2023-end. Blue Owl Capital had $1.3 billion of undrawn capacity under its credit facilities. At the second-quarter end, net debt to equity was 1.20X.
Net cash used in operating activities in the first half of 2024 was $282.2 million against the prior-year operating cash flow figure of $542.8 million.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a third-quarter 2024 dividend of 37 cents per share, to be paid on or before Oct 15, 2024, to shareholders of record as of Sep 30. It also provided a second-quarter 2024 supplemental dividend of 6 cents per share.
Blue Owl Capital’s board earlier approved a new share repurchase plan for 2024, under which the company may purchase shares up to $150 million. The company did not make share repurchases under this program in the second quarter, leaving it with a remaining fund of $150 million.
Merger Agreement
OBDC has agreed to merge with Blue Owl Capital Corporation III and OBDC will come out as the surviving entity. The tax-efficient reorganization effort will involve an exchange ratio for shareholders of OBDE to receive OBDC stock. The agreement has already received board approvals and is expected to be completed in the first quarter of 2025. The move is expected to bring significant operational savings over time while enhancing scale and preserving credit quality.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Blue Owl Capital Corporation has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Blue Owl Capital Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Blue Owl Capital Corporation belongs to the Zacks Financial - Miscellaneous Services industry. Another stock from the same industry, Lazard (LAZ - Free Report) , has gained 8.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Lazard reported revenues of $684.64 million in the last reported quarter, representing a year-over-year change of +10.4%. EPS of $0.52 for the same period compares with $0.24 a year ago.
Lazard is expected to post earnings of $0.43 per share for the current quarter, representing a year-over-year change of +330%. Over the last 30 days, the Zacks Consensus Estimate has changed -13.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Lazard. Also, the stock has a VGM Score of B.
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Why Is Blue Owl Capital Corporation (OBDC) Up 2.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Blue Owl Capital Corporation (OBDC - Free Report) . Shares have added about 2.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blue Owl Capital Corporation due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Blue Owl Capital Beats on Q2 Earnings, Plans OBDE Merger
Blue Owl Capital reported second-quarter 2024 earnings per share (EPS) of 48 cents, which beat the Zacks Consensus Estimate by a penny. The bottom line remained flat year over year.
The total investment income of Blue Owl Capital amounted to $396.8 million, which increased 0.6% year over year. Also, the top line beat the Zacks Consensus Estimate by 2%.
Blue Owl Capital’s better-than-expected second-quarter results were supported by growing investment income, strong portfolio performance, new investment commitments and flat expenses.
Q2 Update
Net investment income increased 1.3% year over year to $189.1 million. Also, the metric beat our estimate by 3.3%. Total new investment commitments (net of sell downs) were $3.3 billion across 25 new portfolio companies and 24 existing ones.
Blue Owl Capital ended the second quarter with investments in 212 portfolio companies, backed with an aggregate fair value of $13.3 billion. Based on the fair value, the average investment size in each portfolio company was $62.9 million as of Jun 30, 2024.
Total expenses remained flat from the year-ago period at $205.2 million in the second quarter. The metric was higher than our estimate of $200.8 million, primarily due to higher interest expenses, management fees and performance-based incentive fees.
The company recorded a net income of $122.2 million in the second quarter compared with $195.6 million in the year-ago period.
Financial Update (as of Jun 30, 2024)
Blue Owl Capital exited the second quarter with cash and restricted cash of $380 million, which declined from $658.7 million as of Dec 31, 2023. Total assets of $13.9 billion rose from $13.5 billion at 2023-end.
Debt was $7.4 billion, up from $7.1 billion at 2023-end. Blue Owl Capital had $1.3 billion of undrawn capacity under its credit facilities. At the second-quarter end, net debt to equity was 1.20X.
Net cash used in operating activities in the first half of 2024 was $282.2 million against the prior-year operating cash flow figure of $542.8 million.
Dividend & Repurchase Update
The board of directors at Blue Owl Capital declared a third-quarter 2024 dividend of 37 cents per share, to be paid on or before Oct 15, 2024, to shareholders of record as of Sep 30. It also provided a second-quarter 2024 supplemental dividend of 6 cents per share.
Blue Owl Capital’s board earlier approved a new share repurchase plan for 2024, under which the company may purchase shares up to $150 million. The company did not make share repurchases under this program in the second quarter, leaving it with a remaining fund of $150 million.
Merger Agreement
OBDC has agreed to merge with Blue Owl Capital Corporation III and OBDC will come out as the surviving entity. The tax-efficient reorganization effort will involve an exchange ratio for shareholders of OBDE to receive OBDC stock. The agreement has already received board approvals and is expected to be completed in the first quarter of 2025. The move is expected to bring significant operational savings over time while enhancing scale and preserving credit quality.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
VGM Scores
Currently, Blue Owl Capital Corporation has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Blue Owl Capital Corporation has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Blue Owl Capital Corporation belongs to the Zacks Financial - Miscellaneous Services industry. Another stock from the same industry, Lazard (LAZ - Free Report) , has gained 8.5% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Lazard reported revenues of $684.64 million in the last reported quarter, representing a year-over-year change of +10.4%. EPS of $0.52 for the same period compares with $0.24 a year ago.
Lazard is expected to post earnings of $0.43 per share for the current quarter, representing a year-over-year change of +330%. Over the last 30 days, the Zacks Consensus Estimate has changed -13.3%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Lazard. Also, the stock has a VGM Score of B.