On Wednesday, CFRA raised its stance on The Carlyle Group LP (NASDAQ:CG), upgrading the stock from Sell to Hold and increasing the price target to $47 from $44. The adjustment comes after the firm's assessment of the shares nearing what they consider fair value, based on a forward price-to-earnings (P/E) ratio of 11.2 times, which aligns closely with the three-year historical average of 11.0 times.
The firm's distributed earnings (DE) estimates for Carlyle Group have also been revised upwards, from $3.90 to $4.20 for 2024, and from $4.50 to $4.60 for 2025. This follows Carlyle's recent report of DE of $1.01 per share, surpassing the consensus estimate by $0.09. The revenue forecast for the company is projected at $4.32 billion for 2024 and $4.77 billion for 2025, with a first-quarter revenue beat of $35 million, totaling $1.0 billion.
Carlyle Group's total assets under management (AUM) have grown to $425 billion, a year-over-year increase of 11.5%. Within this total, fee-earning AUM accounted for $304 billion, up 12.2%, and perpetual capital fee-earning AUM was predominantly linked to the Fortitude unit, totaling $90 billion. The company's AUM is distributed among various segments, with Global Private Equity holding $159 billion (37% of total AUM), Global Credit at $186 billion (44%), and Global Investment Solutions at $80 billion (19%).
A point of concern highlighted was that two private equity funds represent 89% of the total AUM. The company has $76 billion in "dry power," marking a 3% increase, available for investment. Carlyle Group has been active, investing $5.0 billion in the first quarter of 2024 and monetizing $5.9 billion. Funds raised in the first quarter amounted to $5.3 billion, contributing to a 12-month total of $35.6 billion.
Additionally, Carlyle Group has been repurchasing its shares, with $150 million bought back in the first quarter and more than $1.2 billion remaining in its repurchase capacity.
InvestingPro Insights
Recent data from InvestingPro presents a mixed picture for The Carlyle Group LP (NASDAQ:CG). With a market capitalization of $14.84 billion, the company's adjusted P/E ratio stands at -23.9 for the last twelve months as of Q4 2023, reflecting market skepticism about future earnings. However, the PEG ratio of 0.18 suggests that the company's earnings could grow at a much faster rate than its P/E ratio indicates. Additionally, the company has seen a significant 6-month price total return of 65.66%, which may interest growth-oriented investors.
InvestingPro Tips highlight that despite a -41.19% revenue decline in the last twelve months, the company's quarterly revenue growth is up 25.45% for Q4 2023. This could signal a potential turnaround or a positive shift in business momentum. Moreover, with a dividend yield of 3.12%, Carlyle Group may appeal to income-focused investors, especially considering the dividend growth of 7.69% in the same period. For those looking to delve deeper into the financial health and future prospects of Carlyle Group, InvestingPro offers 19 additional tips that can be accessed with a yearly or biyearly Pro and Pro+ subscription using the coupon code PRONEWS24 for an extra 10% off.
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