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Why Shares of Blue Owl Capital Are Falling Heading Into the Weekend

By Bram Berkowitz - Jun 11, 2021 at 4:23PM

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The stock got off to a good start today after receiving a buy rating from an analyst, but then dipped.

What happened

Shares of the alternative asset management company Blue Owl Capital (OWL 1.24%) had fallen more than 13.5% in the final hour of trading for no obvious reason.

So what

Interestingly, the day started off well for Blue Owl after analysts at Goldman Sachs upgraded the company to a buy rating and assigned a one-year price target of $18.50 per share. Shares gained almost 3% in pre-market trading.

But at about 10 a.m. EDT today, things began to unravel and the stock dipped and never recovered. The Goldman report noted that Blue Owl's model was attractive because all of its earnings are from fee income, and its more than $52 billion assets under management are very sticky.

Goldman also said in its note to expect earnings per share to rise at a compound annual growth rate of 40% through 2024, and then at a steady 20% rate after that.

Hand with marker drawing squiggly red line in downward direction.

Image source: Getty Images.

Now what

While I am not exactly sure what brought down the stock today, shares in pre-market trading reached about $17, which is only about 9% off from Goldman's 12-month price target. Blue Owl is also up more than 42% over the past month, so investors might have decided to take some gains today, but the company looks well positioned.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Blue Owl Capital Inc. Stock Quote
Blue Owl Capital Inc.
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