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UPDATE: BMO Capital Markets Raises PT on KKR & Co. After Good 4Q

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In a report published Friday, BMO Capital Markets reiterated its Outperform rating on KKR & Co. (NYSE: KKR), and slightly raised its price target from $19.00 to $20.00.

BMO Capital Markets noted, “KKR reported 4Q12 ENI per unit of $0.48, which beat our estimate of $0.17 and consensus of $0.25 owing to higher-than-expected performance fees (delta of $0.16 per unit) and principal investment appreciation (delta of $0.09 per share). Key takeaways include 1) performance of KKR's underlying private equity investment funds was better than expected with funds appreciating 4.0% vs. our estimate of 1%, 2) the company's balance sheet, which we view as a significant competitive advantage, provided a boost to ENI as its high level of principal investments ($5B) appreciated in value by 1.3% during 4Q12, 3) we expect realizations to remain healthy in 2013, given the favorable backdrop for portfolio company exits, and we also expect investment opportunities to be abundant as M&A deal activity picks up from 2012's level, 4) KKR raised $2.7B of capital in the quarter and $10.6B for the full year, and we expect continued strong fundraising in 2013, with its biggest fund in the fundraising process, NAXI, approaches a final closing in 2H13 with a target of $8B ($7.5B raised to date), and 5) KKR closed on Prisma with $8B in AUM and announced post quarter-end the acquisition of a 25% stake in reinsurance risk manager Nephila Capital with $8B of AUM.”

KKR & Co. closed on Thursday at $17.72.

Posted-In: BMO Capital MarketsAnalyst Color Price Target Analyst Ratings


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