Morgan Stanley has raised its rating for KKR (KKR, Financial) from Equal Weight to Overweight. The firm's new price target for KKR is now set at $150, up from the previous target of $120. This upgrade reflects Morgan Stanley's belief that KKR provides a strategic avenue for investors looking to capitalize on a potential recovery in capital markets. The decision to embrace more risk follows positive developments, such as the easing of tariffs with China, which is expected to diminish significant market risks.
The improved outlook is also anticipated to boost confidence in a gradual recovery of the capital markets, which could further accelerate growth in private market activities, according to analysts. This sentiment aligns with the broader strategy of seeking investments with strong fundamental stability, particularly in uncertain market conditions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for KKR & Co Inc (KKR, Financial) is $144.51 with a high estimate of $189.00 and a low estimate of $127.00. The average target implies an upside of 13.88% from the current price of $126.90. More detailed estimate data can be found on the KKR & Co Inc (KKR) Forecast page.
Based on the consensus recommendation from 21 brokerage firms, KKR & Co Inc's (KKR, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for KKR & Co Inc (KKR, Financial) in one year is $49.20, suggesting a downside of 61.23% from the current price of $126.9. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the KKR & Co Inc (KKR) Summary page.
KKR Key Business Developments
Release Date: May 01, 2025
- Fee-Related Earnings Per Share: $0.92, up 22% year over year.
- Total Operating Earnings Per Share: $1.24, up 16% year over year.
- Adjusted Net Income Per Share: $1.15, up 19% year over year.
- Management Fees: $917 million, up 13% year over year.
- Total Transaction and Monitoring Fees: $262 million.
- Capital Markets Transaction Fees: $229 million.
- Fee-Related Revenues: $1.2 billion, up 22% year over year.
- Fee-Related Earnings: $823 million with an FRE margin of 69%.
- Insurance Segment Operating Earnings: $259 million.
- Strategic Holdings Operating Earnings: $31 million.
- Realized Performance Income: $348 million.
- Realized Investment Income: $218 million.
- Total Monetization Activity: $566 million, up almost 40% year over year.
- Private Equity Portfolio Performance: Up 4% in the quarter and 11% over the last 12 months.
- Opportunistic Real Estate Portfolio Performance: Up 2% in the quarter and 5% over the last 12 months.
- Infrastructure Performance: Up 4% in the quarter and 13% over the last 12 months.
- Leverage Credit Composite Performance: Flat in the quarter and up 7% over the last 12 months.
- Alternative Credit Composite Performance: Up 3% in the quarter and 11% over the last 12 months.
- Dividend: Increased to $0.74 per share on an annualized basis or $0.185 per share quarterly.
- Total New Capital Raised: $31 billion in Q1.
- North America XIV Fundraising: Initial close at $14 billion.
- Private Wealth AUM: $22 billion, up from $9 billion a year ago.
- Committed but Uncalled Capital: $116 billion.
- Capital Not Yet Earning Fees: $64 billion committed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- KKR & Co Inc (KKR, Financial) reported a strong increase in fee-related earnings per share, up 22% year over year, reflecting a robust business model.
- The company raised $31 billion in new capital during Q1, with significant contributions from its North America Private Equity strategy.
- KKR's private equity portfolio showed solid performance, up 4% in the quarter and 11% over the last 12 months.
- The firm increased its dividend for the sixth consecutive year, demonstrating a commitment to returning value to shareholders.
- KKR's insurance segment operating earnings were in line with expectations, and the Strategic Holdings segment showed growth with new acquisitions.
Negative Points
- The impact of tariffs and supply chain issues remains a concern, although KKR believes it is well-positioned to manage these challenges.
- Volatility in the market could affect monetization opportunities, although KKR remains optimistic about its mature portfolio.
- Fundraising efforts may face challenges due to evolving market conditions, although no changes to targets have been made yet.
- The insurance segment's operating earnings are expected to remain flat in the near term, despite ongoing portfolio repositioning.
- There is uncertainty about the broader economic impact of tariffs and potential second or third order effects on the portfolio.
