KKR Shares Rise on Q3 Earnings Beat

The U.S.-based investment firm KKR & Co reported better-than-expected earnings in the third quarter as income from asset sales in its equity division soared along with higher management fees, sending its shares up nearly 3% on Tuesday.

The company that manages multiple alternative asset classes said its after-tax distributable earnings jumped 104% year-on-year to $925 million. The company, which was formerly known as Kohlberg Kravis Roberts & Co, said its after-tax distributable earnings per share rose to $1.05 from $0.48 seen in the same period a year ago. That also beat the market expectations of $0.93 per share.

KKR’s assets under management (AUM) nearly doubled to $459 billion. The company said it invested $24 billion, which included a majority stake in Indian cosmetics firm Vini Cosmetics for $625 million.

Following this, KKR shares jumped nearly 3% to $79.74 on Tuesday.

KKR Stock Price Forecast

Eight analysts who offered stock ratings for KKR in the last three months forecast the average price in 12 months of $77.81 with a high forecast of $90.50 and a low forecast of $72.00.

The average price target represents a -1.37% change from the last price of $78.89. From those eight analysts, seven rated “Buy”, one rated “Hold”, while none rate “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $72 with a high of $119 under a bull scenario and $27 under the worst-case scenario. The firm gave an “Equal-weight” rating on the investment firm’s stock.

Several other analysts have also updated their stock outlook. Citigroup raised the price target to $91 from $90.5. Jefferies lifted the target price to $74 from $66. BMO upped the price target to $83 from $75.

Analyst Comments

“Strong near-term growth with fundraising supercycle and GA accretion coming into earnings, but we see this reflected in the price at the current valuation for a more capital intensive business model. While strong investment performance could drive upward estimate revisions, we have less visibility on more episodic investment income gains,” noted Michael Cyprys, equity analyst at Morgan Stanley.

“Mgmt’s increased focus on expanding the platform with adjacent strategies and scaling successor funds should drive higher fee-related earnings (FRE).”

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