On Tuesday, Jefferies updated its financial outlook for Apollo Global Management (NYSE:APO), raising the investment firm's price target to $134.00 from the previous $114.00, while keeping a Hold rating on the shares.
The adjustment follows Apollo's investor day held last week, where the company outlined a new five-year strategic plan.
The firm's third-quarter 2024 fee-related earnings (FRE) per share estimates were slightly reduced to $0.86 from $0.88, but the full-year 2024 estimates remain at $3.32. The forecast for fiscal year 2025 was increased to $3.96 from $3.74, citing stronger than anticipated asset under management (AUM) growth, with management targeting approximately 15% AUM compound annual growth rate over the next five years.
Jefferies also made marginal adjustments to its full-year 2024 simple realized earnings (SRE) estimate, raising it to $3.2 billion from $3.1 billion, aligning with management's projections. The estimate for fiscal year 2025 was elevated to $3.7 billion, surpassing management's expectation of around $3.5 billion. This increase takes into account the impact of approximately $0.3 billion in management actions taken in 2024.
Additionally, the firm's distributable earnings (DE) per share for the third quarter of 2024 are now estimated at $1.73, up from $1.67, with full-year 2024 projections rising to $7.02 from $6.76. The 2025 DE per share forecast has also been increased to $8.45 from the previous estimate of $7.86.
In other recent news, Apollo Global Management priced its offering of $500 million 6.000% Fixed-Rate Resettable Junior Subordinated Notes due 2054, anticipating net proceeds of approximately $495 million. Apollo also secured a €1 billion investment deal with an affiliate of Vonovia SE, marking their third major transaction.
Analysts' outlooks on Apollo have been positive. BMO Capital Markets, Wells Fargo, and JPMorgan have all increased their price targets for the company. Apollo has also proposed a substantial investment of up to $5 billion in Intel (NASDAQ:INTC) and initiated a financing and capital markets collaboration with BNP Paribas (OTC:BNPQY), which committed an initial $5 billion in financing.
In addition, Apollo established a $25 billion private credit and direct lending program in partnership with Citigroup Inc (NYSE:C).
InvestingPro Insights
Apollo Global Management's recent investor day and Jefferies' updated outlook align with several key metrics and trends highlighted by InvestingPro. The company's market capitalization stands at $76.44 billion, reflecting its significant presence in the Capital Markets industry. Apollo's P/E ratio of 14.39 suggests a relatively attractive valuation, especially considering the firm's strong performance.
InvestingPro Tips indicate that Apollo has maintained dividend payments for 14 consecutive years, demonstrating financial stability. This consistency aligns with Jefferies' positive adjustments to distributable earnings forecasts. Additionally, the stock is trading near its 52-week high, with a robust return of 50.73% over the past year, supporting the optimistic outlook presented at the investor day.
However, investors should note that 4 analysts have revised their earnings downwards for the upcoming period, which may warrant caution. For a more comprehensive analysis, InvestingPro offers 11 additional tips that could provide valuable insights into Apollo's financial health and market position.
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