On Thursday, the investment firm Keefe, Bruyette & Woods adjusted its outlook on Apollo Global Management (NYSE:APO), raising the price target on the company's shares to $130.00 from the previous $122.00. The firm sustained its Outperform rating on the stock.
Apollo Global Management, recognized as a high-growth alternative asset manager, is believed to be well-positioned to benefit from the increasing secular demand for private assets.
This demand spans across various risk and return profiles. According to Keefe, Bruyette & Woods, Apollo's unique trajectory is supported by the necessary components for the company to achieve a double-digit earnings growth rate over the next few years. Specifically, the firm projects a compound annual growth rate (CAGR) of 15% through 2026.
The investment firm's analysis suggests that Apollo's current valuation discount compared to its peers could narrow in the foreseeable future. Currently, Apollo's shares trade at a four-turn discount, with a 12x multiple compared to a 16x median multiple for its peers. The expectation is that as Apollo continues to grow its earnings, this valuation gap will diminish.
In their commentary, Keefe, Bruyette & Woods underscored their confidence in Apollo Global Management by naming it their top pick for the year 2024. The firm's optimistic stance is based on the company's earnings growth potential and its strategic positioning within the market.
The revised price target and estimates by Keefe, Bruyette & Woods reflect their anticipation of Apollo's continued progress and success in the alternative asset management space. The firm's analysis points to a favorable outlook for Apollo's stock as the company moves forward.
InvestingPro Insights
Keefe, Bruyette & Woods' recent optimistic outlook on Apollo Global Management (NYSE:APO) is complemented by several positive indicators reflected in the real-time data from InvestingPro. Apollo's robust presence in the Financial Services industry and its consistent dividend payments are noteworthy. Here are some key insights:
InvestingPro data highlights that Apollo has a market capitalization of $62.46 billion, with a Price/Earnings (P/E) ratio of 13.06, which is slightly below the adjusted P/E ratio for the last twelve months as of Q4 2023, sitting at 12.83. This valuation suggests that the company may be reasonably priced relative to its earnings. Additionally, Apollo's revenue growth has been impressive, reporting a 194.58% increase in the last twelve months as of Q4 2023.
The company's stock price has experienced significant appreciation, reflected in the 56.03% one-year price total return. This strong performance is further emphasized by the 25.98% price total return over the last six months. These metrics underscore Apollo's robust market performance and may align with Keefe, Bruyette & Woods' positive assessment and the firm's potential for earnings growth.
InvestingPro Tips further reveal that while analysts have revised their earnings downwards for the upcoming period and anticipate a sales decline in the current year, Apollo is predicted to remain profitable. This profitability, combined with a history of dividend payments for 14 consecutive years, positions Apollo as a potentially attractive option for investors seeking both growth and income.
For those interested in a deeper dive into Apollo's financials and future prospects, InvestingPro offers additional insights. There are 13 more InvestingPro Tips available, which can provide a more comprehensive understanding of Apollo's position in the market. To access these insights and enhance your investment strategy, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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