KKR & Co. Inc. (KKR) manages private equity, energy, infrastructure, real estate, credit strategies, and hedge fund investments. With a market cap of $133.7 billion, the New York-based company specializes in acquisitions, LBOs, MBOs, credit funding, growth equity, mezzanine, distressed, turnaround, and other investments.
The private equity giant has significantly outperformed the broader market over the past year. KKR stock prices have soared 81.7% on a YTD basis and 125.9% over the past year, outpacing the S&P 500 Index’s ($SPX) rally of 24.7% in 2024 and 32.3% over the past 52 weeks.
Narrowing the focus, KKR has also outperformed the Invesco Global Listed Private Equity ETF’s (PSP) 10.8% gains in 2024 and 27.8% returns over the past year.
KKR has continued to observe solid growth in AUM, its fee-paying AUM has grown 19.3% year-over-year to $506 billion by the end of Q3, with a $25 billion increase in organic new capital raised in Q3 and $122 billion in the last twelve months. Moreover, it has a dry powder of $108 billion across the firm’s various investment strategies enabling it to take on future investment opportunities. Shares of KKR surged 3.4% after the release of its impressive Q3 earnings on Oct. 24. The company reported a staggering 44.5% year-over-year growth in total revenues, reaching $4.8 billion, and even more notably its net premium revenues skyrocketed 182.1% compared to the year-ago quarter, totaling $621.2 million.
Additionally, KKR also reported a massive 51.5% growth in adjusted net income to $1.2 billion, and its adjusted EPS of $1.38 surpassed analysts’ bottom-line estimates by a large margin, bolstering investors’ confidence.
For the current fiscal, ending in December, analysts expect KKR to report a 47.7% year-over-year growth in adjusted EPS to $4.12. The company has a mixed earnings surprise history. It surpassed analysts’ bottom-line estimates in three of the past four quarters while missing on one other occasion.
KKR has a consensus “Strong Buy” rating overall. Out of the 18 analysts covering the stock, 14 recommend “Strong Buy,” one advises “Moderate Buy,” and three suggest a “Hold” rating.
This configuration is slightly more bullish than three months ago when 13 analysts recommended “Strong Buy” ratings.
On Oct. 29, JMP Securities analyst Devin Ryan maintained an “Outperform” rating on KKR while raising the price target to $155.
KKR’s mean price target of $158.89 represents a premium of just 5.6% to current price levels. The Street-high target of $184 suggests a potential upside of 22.2%.
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