Blue Owl Capital Corporation (OBDC) Up 3.4% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Blue Owl Capital Corporation (OBDC). Shares have added about 3.4% in that time frame, outperforming 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 drivers. Blue Owl Capital’s Q3 Earnings Miss on Higher Expenses, Investment Income UpBlue Owl Capital reported third-quarter 2024 earnings per share (EPS) of 47 cents, which missed the Zacks Consensus Estimate by a penny. The bottom line declined by 2 cents from a year ago.The total investment income of Blue Owl Capital amounted to $406.03 million, which increased 1.8% year over year. Also, the top line beat the Zacks Consensus Estimate by 1.6%.Blue Owl Capital’s weak third-quarter earnings were due to higher expenses and lower interest income from non-controlled, non-affiliated investments. The negatives were partially offset by higher investment income from controlled, affiliated investments.Q3 UpdateNet investment income decreased 2.7% year over year to $184.9 million. Also, the metric missed our estimate of $188.9 million. Total new investment commitments (net of sell-downs) were $1.2 billion across 23 new portfolio companies and 14 existing ones.Blue Owl Capital ended the third quarter with investments in 219 portfolio companies, backed with an aggregate fair value of $13.4 billion. Based on the fair value, the average investment size in each portfolio company was $61.4 million as of Sept. 30, 2024.Total expenses increased 5.5% from the year-ago period to $217.6 million in the third quarter. The metric was higher than our estimate of $208.9 million, primarily due to higher interest expenses, management fees and other G&A expenses.The company recorded a net income of $135.4 million in the third quarter compared with $206.9 million in the year-ago period.Financial Update (as of Sept. 30, 2024)Blue Owl Capital exited the third quarter with a cash balance of $481.3 million, which declined from $658.7 million as of Dec. 31, 2023. Total assets of $14.09 billion rose from $13.51 billion at 2023-end.Debt was $7.74 billion, up from $7.08 billion at 2023-end. Blue Owl Capital had $1.6 billion of undrawn capacity under its credit facilities. At the third-quarter end, net debt to equity was 1.23X.Net cash used in operating activities in the first nine months of 2024 was $285.74 million against the prior-year operating cash flow figure of $721.75 million.Dividend & Repurchase UpdateThe board of directors at Blue Owl Capital declared a fourth-quarter 2024 dividend of 37 cents per share, to be paid on or before Jan. 15, 2025, to shareholders of record as of Dec. 31, 2024. It also provided a third-quarter 2024 supplemental dividend of 5 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. It did not make share repurchases under this program in the third quarter.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates review.VGM ScoresCurrently, Blue Owl Capital Corporation has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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 PlayerBlue Owl Capital Corporation is part of the Zacks Financial - Miscellaneous Services industry. Over the past month, Bread Financial Holdings (BFH), a stock from the same industry, has gained 2.8%. The company reported its results for the quarter ended September 2024 more than a month ago.Bread Financial reported revenues of $983 million in the last reported quarter, representing a year-over-year change of -4.7%. EPS of $1.84 for the same period compares with $3.46 a year ago.For the current quarter, Bread Financial is expected to post earnings of $0.25 per share, indicating a change of -72.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -27.1% over the last 30 days.Bread Financial has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Blue Owl Capital Corporation (OBDC): Free Stock Analysis Report Bread Financial Holdings, Inc. (BFH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks