Market Overview

Morgan Stanley Is Out Positive On Apollo: 3 Reasons To Buy

Share:
Morgan Stanley Is Out Positive On Apollo: 3 Reasons To Buy

With shares of Apollo Global Management LLC (NYSE: APO) down 12.5 percent this year, now is a compelling time to buy, according to Morgan Stanley.

The Analyst

Morgan Stanley’s Michael Cyprus reiterated an Overweight rating on Apollo with a $41 price target.

The Thesis

Cyprus gave three reasons why Apollo is at an inflection point that's not being priced into the stock:

  • New initiatives will accelerate growth in management fee earnings, along with faster scaling in the credit business and fees turning online, the analyst said. The “stickier earnings steam” should drive a higher multiple, he said. 
  • Performance fees in private equity are expected to double in 2018 compared to 2017, a pace Cyprus said should be sustained over the next few years. Harvesting from Fund VIII, energy funds and credit funds will be key fee generators, he said. 
  • Cyprus noted that only $1.03 per share of value for performance fees has been priced into the stock. A sum-of-the-parts valuation leads him to believe there should be $13.14 per share of value.

The analyst said expects 27 percent of the current share price to be returned in dividends over the next three years.

Price Action

Apollo shares were up 1.91 percent at the time of publication Monday morning. 

Related Links:

Morgan Stanley Turns Bullish On Apollo Global Management: Here's Why

Where Money Flows: Top Hedge Fund Trends In 2018

Latest Ratings for APO

DateFirmActionFromTo
Dec 2019DowngradesBuyNeutral
Nov 2019MaintainsOutperform
Nov 2019MaintainsBuy

View More Analyst Ratings for APO
View the Latest Analyst Ratings

Posted-In: Michael Cyprus Morgan Stanley private equityAnalyst Color News Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (APO)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
AMRXRaymond JamesDowngrades
MDStifelUpgrades33.0
CATStandpoint ResearchDowngrades
LULUPiperJaffrayMaintains245.0
LULUWells FargoMaintains260.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

5 Biggest Price Target Changes For Monday

Markets Poised For Gains As Fears Of US-China Trade War Diminish