KKR & Co. Inc. (KKR), headquartered in New York, is a private equity and real estate investment firm specializing in direct and fund-of-fund investments. Valued at $101 billion by market cap, the leading global investment firm manages investments such as private equity, energy, infrastructure, real estate, credit strategies, and hedge funds.
Shares of this private equity giant have outperformed the broader market considerably over the past year. KKR has gained 84.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 19.6%. In 2024, KKR stock is up 37.4%, surpassing SPX’s 12% rise on a YTD basis.
Zooming in further, KKR’s outperformance looks more impressive compared to Invesco Global Listed Private Equity ETF (PSP). The exchange-traded fund has gained about 12% over the past year. Moreover, KKR’s double-digit gains on a YTD basis outshine the ETF’s 2% losses over the same time frame.
KKR’s overall performance can be attributed to growth in management, transaction, and performance fees, along with earnings from its annuities business. The company saw a significant increase in investor capital, raising $32 billion in new funds, which was largely driven by successful fundraising efforts at Global Atlantic, asset-based finance, direct lending in the U.S. and Europe, and collateralized loan obligation formation. This marked one of the most successful fundraising quarters in KKR's history.
On Jul. 31, KKR shares closed up more than 2% after reporting its Q2 earnings results. The company’s revenue increased 15% year over year to $4.2 billion. Its EPS stood at $0.72, down 23.4% from the year-ago quarter. Its fee-related earnings rose by 25.4% year over year to $755.4 million. KKR’s adjusted net income increased by 48.9% year over year to $971.9 million.
For the current fiscal year, ending in December, analysts expect KKR’s EPS to grow 43.7% to $4.01 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion. Moreover, the company surpassed its consensus EPS estimate by 2.3% in the previous quarter.
Among the 16 analysts covering KKR stock, the overall consensus is a “Strong Buy.” That’s based on 14 “Strong Buy” ratings, one “Moderate Buy,” and one “Hold.”
This configuration is more bullish than a month ago, with 13 analysts suggesting a “Strong Buy.”
On Aug. 1, Evercore ISI analyst Glenn Schorr maintained a “Buy” rating on KKR with a price target of $135.
The mean price target of $135.06 represents an 18.6% premium to KKR’s current price levels. The Street-high price target of $159 suggests an upside potential of 39.6%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
