Last Update 21 Dec 25

Fair value Increased 17%

KKR: Fundraising Strength And Capital Markets Recovery Will Drive Balanced Risk Reward

Analysts have raised their price target on KKR to approximately $139 from about $119, citing stronger than previously expected fundraising and deployment, resilient earnings leverage to a recovering capital markets backdrop, and improving profit margin assumptions despite slightly less negative revenue growth forecasts.

Analyst Commentary

Recent Street research on KKR reflects a mixed but generally constructive outlook, with several target price revisions framing a range of potential outcomes for the shares. While some forecasts have moved higher following strong Q3 fundraising and deployment, others have been revised downward as analysts recalibrate expectations for earnings growth and market conditions.

Bullish voices highlight that KKR continues to demonstrate robust earnings leverage to a recovering capital markets environment, supported by strong fundraising momentum and solid deployment trends. A new initiation with an Outperform rating and a price target in the high $140s underscores the view that KKR is well positioned to benefit from a reopening of IPO and M&A markets, particularly through its private equity franchise.

At the same time, there have been multiple downward adjustments to price targets across the Street, even where positive ratings were maintained. These changes reflect a more nuanced perspective on near term return potential, as analysts balance KKR's structural growth drivers against evolving macro risks, credit concerns, and the pace of capital markets recovery.

Overall, the analyst community continues to see KKR as a beneficiary of longer term secular trends in alternatives, but several firms have tempered their upside expectations, signaling that execution on fundraising, investment performance, and realizations will be critical to sustaining premium valuation levels.

Bearish Takeaways

Bearish analysts have cut price targets from prior peaks in the mid to high $160s into the mid $150s range, suggesting reduced conviction that KKR can sustain its earlier growth trajectory and valuation multiples.
Model updates following Q3 results point to lingering uncertainty around near term earnings visibility, with some viewing upcoming management commentary as a key clearing event before re rating the stock.
Concerns around credit and broader market volatility are cited as potential headwinds to capital deployment and realizations, raising the risk that earnings leverage to a capital markets rebound could materialize more slowly than previously assumed.
Despite continued positive ratings, the pattern of lower targets implies that any missteps in fundraising, fee growth, or investment performance could drive further downside revisions to KKR's valuation framework.

What's in the News

KKR led a consortium that sold its stake in the Hyatt Regency Tokyo for over $800 million, likely doubling its investment after acquiring the asset in 2023 (Wall Street Journal).
KKR has launched fundraising for its fifth Asia private equity fund with a $15 billion target, positioning it among the region's largest vehicles and focusing on sectors including consumer, healthcare, and industrials (Reuters).
KKR is in the second round of bidding for Hong Kong based corporate services provider Acclime, in a potential deal valuing the company at over $900 million, alongside TPG and Warburg Pincus (Reuters).
KKR is considering the sale of its 40 percent stake in Pembina Gas Infrastructure, a holding that could be valued at roughly $7 billion, and has hired Scotiabank to gauge buyer interest (Reuters).
A KKR owned stake in Epic Games is indirectly in focus as Google agreed to a comprehensive antitrust settlement with Epic that would reshape distribution and payments terms on Android and Google Play, pending court approval (Reuters).

Valuation Changes

Fair Value: increased from approximately $119 to about $139, reflecting a meaningful upward revision in estimated intrinsic value.
Discount Rate: risen modestly from about 8.3 percent to roughly 9.3 percent, implying a slightly higher required return and risk assessment.
Revenue Growth: projected decline has narrowed slightly, with the revenue growth rate improving from about negative 23.7 percent to roughly negative 22.8 percent.
Net Profit Margin: expanded significantly from around 47.2 percent to approximately 64.6 percent, indicating a stronger long term profitability outlook.
Future P/E: edged higher from about 24.2 times to roughly 24.7 times, signaling a small increase in the valuation multiple applied to forward earnings.

Continued diversification in asset management and private wealth signals potential revenue growth by expanding client bases and launching new credit products.
Strategic investments in lower-risk ventures and full ownership of Global Atlantic are expected to enhance earnings and net profit margins.
KKR's growth faces uncertainty due to market volatility, geopolitical tensions, and competitive pressures in key segments like asset management and private credit.

Catalysts

About KKR

A private equity and real estate investment firm specializing in direct and fund of fund investments.What are the underlying business or industry changes driving this perspective?

KKR's strong performance in asset management and anticipated momentum in private wealth, including the recent launch of hybrid credit products, indicate potential for increased revenues through diversifying and expanding client bases.
The growth in fee-related earnings, which have shown significant annual increases, paired with a pipeline for further management fee growth, is expected to continue contributing positively to KKR's earnings moving forward.
Strategic Holdings' expansion with additional investments in businesses presenting lower cyclical risk and strong cash generation potential is likely to drive future earnings growth, enhancing overall financial resilience.
The integration and 100% ownership of Global Atlantic, alongside a shift towards longer-duration, private market assets, suggest increased earnings potential from insurance operations, positively impacting KKR’s net profit margins.
KKR's active investment environment and the anticipated increase in monetizations, driven by improved M&A conditions, suggest future revenue growth through increased transaction activities across its portfolio.

KKR Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

This narrative explores a more pessimistic perspective on KKR compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
The bearish analysts are assuming KKR's revenue will decrease by 23.7% annually over the next 3 years.
The bearish analysts assume that profit margins will increase from 11.6% today to 47.2% in 3 years time.
The bearish analysts expect earnings to reach $5.5 billion (and earnings per share of $5.38) by about April 2028, up from $3.1 billion today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 24.2x on those 2028 earnings, down from 33.0x today. This future PE is lower than the current PE for the US Capital Markets industry at 24.5x.
Analysts expect the number of shares outstanding to grow by 0.1% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.26%, as per the Simply Wall St company report.

KKR Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

KKR's reliance on market conditions to improve for continued financial growth introduces uncertainty; adverse changes in the macro environment or geopolitical tensions could negatively affect future revenues and earnings.
KKR's profitability is subject to volatility in its Asset Management segment, driven largely by private equity and infrastructure segment performance; any downturn in these areas could lead to decreased earnings.
Competitive pressure in the private credit and infrastructure markets could compress margins, impacting net margins negatively if KKR cannot sustain its current edge.
Rising interest rates and market volatility may affect transaction volumes and investment performance, potentially suppressing realized investment income and net income.
Execution risk related to growth through strategic holdings and various new product lines could impact strategic goals, possibly straining revenue growth and earnings if these strategies do not yield the expected returns.

Valuation

How have all the factors above been brought together to estimate a fair value?

The assumed bearish price target for KKR is $118.7, which represents one standard deviation below the consensus price target of $135.92. This valuation is based on what can be assumed as the expectations of KKR's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $194.0, and the most bearish reporting a price target of just $114.0.
In order for you to agree with the bearish analysts, you'd need to believe that by 2028, revenues will be $11.7 billion, earnings will come to $5.5 billion, and it would be trading on a PE ratio of 24.2x, assuming you use a discount rate of 8.3%.
Given the current share price of $114.27, the bearish analyst price target of $118.7 is 3.7% higher. The relatively low difference between the current share price and the analyst bearish price target indicates that they believe on average, the company is fairly priced.
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.

Have other thoughts on KKR?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystLowTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystLowTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystLowTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Asset Management And Private Wealth Will Drive Future Momentum