How Investors Are Reacting To KKR (KKR) Partnering With TotalEnergies on Major Solar Portfolio Expansion

• TotalEnergies recently announced the sale of a 50% stake in its 1.4-gigawatt North American solar portfolio to KKR, covering six utility-scale and 41 distributed solar assets, with TotalEnergies retaining operational control.
• This transaction not only marks a major move by KKR into renewables but also signals its growing emphasis on energy transition investments alongside traditional private equity activities.
• We’ll explore how KKR’s expansion into utility-scale solar assets may shape its long-term growth outlook and portfolio diversification strategy.

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KKR Investment Narrative Recap

To believe in KKR as a shareholder, you need confidence in the ongoing shift toward private markets, KKR's global scale, and its ability to grow through major fundraising and expansion in asset-based finance and infrastructure. The acquisition of a 50% stake in TotalEnergies’ solar portfolio underscores KKR’s commitment to energy transition investments but does not materially alter the company's primary near-term catalyst, its strong fundraising and fee growth potential. The main risk for investors remains potential asset quality or liquidity issues if growth in private credit or asset-based finance slows or underperforms.

An adjacent development worth noting is KKR’s consideration of selling its 40% stake in Pembina Gas Infrastructure, valued at roughly US$7 billion. While not directly connected to the renewables deal, such potential asset sales may impact future monetization timing and the mix of fee versus performance revenue, relevant given how reliant KKR’s earnings are on monetization activity and deal exits.

But against this backdrop, investors should keep an eye on liquidity risks tied to rapid growth in private credit and asset-based finance...

Read the full narrative on KKR (it's free!)

KKR's outlook anticipates $13.7 billion in revenue and $5.4 billion in earnings by 2028. This scenario assumes a 13.9% annual decline in revenue and an increase of $3.4 billion in earnings from the current $2.0 billion level.

Uncover how KKR's forecasts yield a $164.47 fair value, a 29% upside to its current price.

Exploring Other Perspectives

Seven private member fair value estimates from the Simply Wall St Community span US$69 to US$170, showing significant divergence on KKR’s prospects. You can see this wide range of opinions in contrast to catalysts focused on new fundraising and asset expansion, encouraging you to compare multiple viewpoints before making up your mind.

Explore 7 other fair value estimates on KKR - why the stock might be worth 46% less than the current price!

Build Your Own KKR Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your KKR research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free KKR research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate KKR's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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