Energy Transition And Digital Trends Will Unlock Robust Global Infrastructure

Key Takeaways

• Strategic expansion, early moves into new channels, and strong leadership may drive outperformance, higher recurring revenues, and step-change earnings growth beyond market expectations.
  
• Deep infrastructure exposure and global presence position EQT to capitalize on decarbonization, digitalization, and supply chain shifts, securing premium fee streams and resilient asset growth.
  
• Heightened market volatility, competitive pressures, and macroeconomic risks threaten EQT's revenue growth, earnings stability, and ability to sustain investor returns over time.

Catalysts

A global private equity & venture capital firm specializing in private capital and real asset segments.

• Analyst consensus believes EQT's proven leadership succession will maintain operational excellence and a strong investment track record, but this likely understates the upside from Per Franzén's leadership, whose unique dealmaking and strategic expansion could drive not just operational continuity but a step change in value creation and investment outperformance, accelerating growth in both revenues and earnings beyond current expectations.
  
• Analysts broadly agree that EQT's substantial €50 billion dry powder and disciplined cycle-tested investment approach will allow the firm to seize opportunities in volatile markets; however, this underappreciates the potential for EQT to aggressively capture outsized positions in the accelerating global infrastructure and digitalization buildout, positioning them to deliver significantly higher long-term fee-related revenues and carry income from first-mover advantages in critical future sectors.
  
• EQT is poised to benefit disproportionately from the global push for decarbonization and energy transition, as its infrastructure platform is already deeply embedded in energy, digital, and essential service assets; as regulatory mandates and international demand surge for low-carbon infrastructure, EQT could see rapid asset growth and a premium fee mix that sharply boosts top-line and recurring revenue.
  
• The firm's early moves into evergreen product vehicles and the private wealth channel in both Europe and the U.S. position EQT to tap entirely new pools of long-duration, sticky capital, which could drive a structural step-up in management fees, enhance margin stability, and anchor higher long-term earnings growth irrespective of traditional institutional fundraising cycles.
  
• EQT's global footprint and on-the-ground presence in U.S., Europe, and Asia enables the company to uniquely capitalize on rising trends in economic security and supply chain diversification among governments and corporates seeking resilient partners, unlocking avenues for large cross-border deals and direct public-to-private transactions, which could trigger faster asset growth and materially lift both fee and carry income over the coming decade.

EQT Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on EQT compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming EQT's revenue will grow by 18.4% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 29.3% today to 65.0% in 3 years time.
• The bullish analysts expect earnings to reach €2.9 billion (and earnings per share of €2.42) by about July 2028, up from €776.3 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 17.8x on those 2028 earnings, down from 45.8x today. This future PE is lower than the current PE for the SE Capital Markets industry at 23.0x.
• Analysts expect the number of shares outstanding to decline by 0.17% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.21%, as per the Simply Wall St company report.

EQT Future Earnings Per Share Growth

Risks

• Prolonged market uncertainty and elevated volatility are leading to slower exit activity and elongated fundraising cycles, which could impact EQT's management fee growth, carried interest recognition, and overall revenue visibility for multiple years.
  
• Competitive pressures within the private markets industry, including increasing competition for institutional capital and the need for continued product innovation such as Evergreens, could lead to higher client acquisition costs and compress net margins.
  
• Valuations of portfolio companies are susceptible to adverse movements in public markets and currency effects, particularly weakness in the U.S. dollar against the euro, which can negatively affect EQT's reported earnings and fund valuations.
  
• A period of sustained weak deal activity, low exits, or extended periods of uncertainty may delay or suppress performance fees and carried interest, thereby impacting EQT's net earnings and investor returns longer term.
  
• Although EQT's infrastructure and logistics real estate assets have seen strong demand, the company is exposed to macroeconomic shocks, regulatory headwinds, and global trade slowdowns, which could reduce revenue growth rates and increase earnings volatility in the long run.

Valuation

• The assumed bullish price target for EQT is SEK405.52, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of EQT's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK405.52, and the most bearish reporting a price target of just SEK290.47.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be €4.4 billion, earnings will come to €2.9 billion, and it would be trading on a PE ratio of 17.8x, assuming you use a discount rate of 6.2%.
• Given the current share price of SEK337.4, the bullish analyst price target of SEK405.52 is 16.8% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.