By Bill Alpert

Ahead of March quarter earnings reports, the analysts who follow alternative asset managers like Blue Owl Capital are revisiting their forecasts for that beleaguered industry. Especially for Blue Owl.

Shares of Blue Owl are down by half since last summer, to a recent $10, on worries that new artificial intelligence tools will hurt the software company borrowers in the company's private credit portfolios. Over 20% of the shares in its large nontraded credit fund sought to redeem in the March quarter.

Those with Buy and Neutral ratings on the stock seem to be sticking to their views.

Raymond James analyst Wilma Burdis recently took a deep dive into Blue Owl's software borrowers, to test the Buy rating she has had on the firm since October. In a Monday report, she concluded that AI doesn't threaten imminent loan losses. The asset manager's fund-raising and fees will keep growing, she says.

"Our analysis supports our favorable outlook and didn't imply imminent credit risk," Burdis wrote. "We reaffirm our Strong Buy rating."

With help from Raymond James software analysts, Burdis examined software companies that borrowed about $12 billion from five Blue Owl funds, or about 16% of the funds' $74 billion in loans. She looked most closely at those deemed in AI's shadow.

Spreads have widened on about 12% of those loans, suggesting that lenders and investors are worried. But spreads have narrowed on some 40% of the loans, suggesting that the companies have improved their borrowing positions.

Among 10 software companies she studied with industry experts, Burdis concluded that most were pretty safe from AI obsolescence, and many were applying the new technology themselves. Only two Blue Owl borrowers -- the project management software vendor Smartsheet, and the website marketing software firm Sitecore -- seemed at high risk of AI disruption.

"Owl's software loans appear to be predominantly good assets," Burdis said. She thinks the stock can double, to $20.

Since he arrived at UBS last fall, analyst Michael Brown has thought Wall Street's expectations for Blue Owl were too high.

He still thinks so. In a Monday note, Brown said he expects that Blue Owl fee growth will disappoint investors, as Federal Reserve rate cuts and stalled fund-raising challenge the private credit manager.

Brown maintains his Neutral rating and $9 target price on Blue Owl stock.

Write to Bill Alpert at william.alpert@barrons.com

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April 15, 2026 17:28 ET (21:28 GMT)

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