Goldman Sachs Upgrades KKR (KKR) to Buy, Sees 'Accelerating Harvesting'
Get Alerts KKR Hot Sheet
Price: $95.15 --0%
Rating Summary:
17 Buy, 4 Hold, 1 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 9 | Down: 7 | New: 39
Rating Summary:
17 Buy, 4 Hold, 1 Sell
Rating Trend: Up
Today's Overall Ratings:
Up: 9 | Down: 7 | New: 39
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Goldman Sachs upgraded KKR (NYSE: KKR) from Neutral to Buy with a price target of $19.50 (from $16.50).
The firm expects shares to outperform citing: 1) Post significant 4Q12 realization activity, the 2006 Fund has substantially filled the "netting hole" pushing this $16 bn fund closer to "cash" carry mode and supporting accelerating distributions in ‘13; 2) A $6.5 bn balance sheet offers strategic and financial flexibility to diversify the firm via seeding new funds and new acquisitions; 3) Valuation is attractive with the implied performance fee multiple at 1.3X vs. the group's 2.7X, suggesting investors undervalue the firm’s cash carry-generating potential in 2013.
Goldman lowered 2012 ENI estimate to $2.14 from $2.80 on lower portfolio performance in 4Q12, but raised 2013/2014 ENI estimates to $2.40/$2.55 on a better outlook for fund appreciation in 2013. The firm raiseed 2013/2014 distribution forecasts to $1.19/$1.20, well ahead of the Street's $1.06/$1.02.
For an analyst ratings summary and ratings history on KKR click here. For more ratings news on KKR click here.
Shares of KKR closed at $15.54 yesterday.
The firm expects shares to outperform citing: 1) Post significant 4Q12 realization activity, the 2006 Fund has substantially filled the "netting hole" pushing this $16 bn fund closer to "cash" carry mode and supporting accelerating distributions in ‘13; 2) A $6.5 bn balance sheet offers strategic and financial flexibility to diversify the firm via seeding new funds and new acquisitions; 3) Valuation is attractive with the implied performance fee multiple at 1.3X vs. the group's 2.7X, suggesting investors undervalue the firm’s cash carry-generating potential in 2013.
Goldman lowered 2012 ENI estimate to $2.14 from $2.80 on lower portfolio performance in 4Q12, but raised 2013/2014 ENI estimates to $2.40/$2.55 on a better outlook for fund appreciation in 2013. The firm raiseed 2013/2014 distribution forecasts to $1.19/$1.20, well ahead of the Street's $1.06/$1.02.
For an analyst ratings summary and ratings history on KKR click here. For more ratings news on KKR click here.
Shares of KKR closed at $15.54 yesterday.
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