KKR (KKR) Stock Forecast & Price Target

KKR demonstrated strong financial performance, raising $32.4 billion in fundraising during the quarter, which exceeded both estimates and brought its year-to-date total to $63 billion. The continued momentum in the K-Series products, with a 56% quarter-over-quarter increase, and robust performance across its Capital Markets segment, point towards a solid trajectory for fee-paying AUM growth. Additionally, the company's FRE margin showed improvement, with a reported FRE/share of $0.84, reflecting higher transaction fees and supporting a positive outlook for ongoing earnings growth.

KKR's recent financial performance indicates a concerning trend, particularly with its insurance operating earnings, which fell significantly short of expectations and reported a return on equity (ROE) of 12.2%, below the guided target range of 14-15%. The company's estimates for adjusted net income (ANI) for 2024 and 2025 have been reduced due to lower insurance operating earnings, realized performance income, and an increased share count, which collectively reflect underlying weaknesses in its core segments. Moreover, limited transparency regarding the firm’s non-public investments, alongside potential regulatory challenges that may restrict capital raising and investment activities, raises further doubts about KKR's financial outlook.