Ares Management (ARES) Soars 4.1%: Is Further Upside Left in the Stock?

Ares Management ARES shares ended the last trading session 4.1% higher at $149.58. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 20.2% loss over the past four weeks.

Ares Management stock increased in price for the second consecutive trading session, driven by a combination of strategic acquisitions and analyst upgrades. Following a recent sell-off in financial stocks, the rating for ARES has been upgraded to Outperform by Oppenheimer, which reflects the stock’s attractive valuation. Also, amid growing demand in sectors like data centers and AI, Ares Management announced the acquisition of a stake in a diversified U.S. renewable energy portfolio from EDP Renovaveis. These moves are expected to have instilled investor confidence in the stock, driving it higher.

This private equity firm is expected to post quarterly earnings of $1.14 per share in its upcoming report, which represents a year-over-year change of +20%. Revenues are expected to be $1.1 billion, up 37.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Ares Management, the consensus EPS estimate for the quarter has been revised 1.1% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on ARES going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Ares Management is part of the Zacks Financial - Investment Management industry. Invesco IVZ, another stock in the same industry, closed the last trading session 0.7% higher at $23.45. IVZ has returned 4.3% in the past month.

For Invesco, the consensus EPS estimate for the upcoming report has changed +4.1% over the past month to $0.46. This represents a change of +4.6% from what the company reported a year ago. Invesco currently has a Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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