On Friday, KKR & Co. Inc. (NYSE:KKR) saw its price target increase by Evercore ISI, reflecting confidence in the investment firm's growth prospects. The new price target has been set at $158.00, up from the previous $145.00, while the Outperform rating remains unchanged.
KKR recently reported a third-quarter after-tax net income (ANI) per unit of $1.38, surpassing both the analyst's and the consensus estimates, which stood at $1.21 and $1.20, respectively. The upbeat financial results were accompanied by a positive conference call where management highlighted various indicators of KKR's momentum.
The company's management outlined several factors contributing to its optimistic outlook. These include robust investment performance, an increase in unrealized carry and embedded balance sheet gains, and strong fundraising activities. KKR is preparing for an upcoming fundraising supercycle and is also experiencing growth in its wealth-focused products.
Additionally, KKR has seen an 18% increase in assets under management (AUM) and a 10% rise in dry powder, which is industry jargon for capital available for investment. The firm also noted improvements in the dividends from strategic holdings and better deployment trends, leading to higher capital markets revenues.
The management's commentary during the conference call also paralleled observations from banks, suggesting that the investment banking sector is at the beginning of a multi-year recovery phase. This sentiment further bolsters confidence in KKR's trajectory toward achieving its ambitious growth and profitability targets.
In other recent news, KKR & Co. Inc. has reported a robust Q3 performance with record fee-related earnings (FRE) surpassing $1 billion, which is a 32% increase from the previous quarter. The company also saw a noteworthy rise in adjusted net income (ANI) per share to $1.38, marking a 50% year-over-year growth.
The firm's strategic initiatives and market performance have led to substantial growth in assets under management (AUM) and a positive outlook for future earnings and monetizations.
In addition to these earnings, KKR has raised $87 billion in new capital this year, which is more than double the amount in the same period of 2023. The firm's operating earnings were $1.47 per share, with management fees up 18% year-over-year to $893 million. Projections show significant contributions from strategic holdings, with net dividends expected to reach $300 million by 2026 and $600 million by 2028.
Despite a sluggish IPO market and a slight decline in Private Equity fee rates, KKR reported robust fundraising across various segments, with infrastructure and real estate AUM nearing $80 billion each. The company's capital markets business achieved record revenues of $424 million, with expectations of a 50% increase in 2024 compared to the previous two years.
These recent developments indicate KKR's strong momentum in proprietary origination and fundraising, with a total addressable market projected to grow from $5 trillion to $7 trillion.
InvestingPro Insights
KKR's recent performance and positive outlook are further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $127.15 billion, reflecting its significant presence in the Capital Markets industry. KKR's revenue growth of 120.85% over the last twelve months as of Q2 2024 aligns with the management's report of increased AUM and robust fundraising activities.
InvestingPro Tips highlight that KKR has maintained dividend payments for 15 consecutive years, demonstrating financial stability even in challenging market conditions. This consistency in dividend payments could be particularly attractive to investors seeking reliable income streams in the current economic environment.
Another relevant InvestingPro Tip indicates that KKR is trading near its 52-week high, which corroborates the positive sentiment expressed by Evercore ISI's increased price target. The stock's strong performance is further evidenced by its impressive 163.03% price total return over the past year.
For investors seeking more comprehensive insights, InvestingPro offers 13 additional tips on KKR, providing a deeper understanding of the company's financial health and market position.
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