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Investing.com - BofA Securities downgraded Partners Group Holding AG (SIX:PGHN) (OTC:PGPHF) stock rating from Buy to Neutral on Tuesday, while significantly reducing its price target to CHF1,100.00 from CHF1,470.00.
The downgrade reflects BofA’s revised earnings per share forecast, which has been cut by 10-12% due to weaker fundraising expectations, reduced performance fees, and unfavorable foreign exchange impacts. The firm’s new profit projections now sit 6-8% below the consensus estimates for the company.
Partners Group, a global private markets investment manager, has missed its assets under management (AUM) growth target of 10% or more for three consecutive years, according to BofA. The investment bank now forecasts 8-9% annual growth (excluding foreign exchange and M&A) for 2025-2027, citing lower fundraising and pressures in evergreen performance and redemptions.
BofA assigned a new fair value multiple of 21x for Partners Group, down from previous valuations, citing slower growth prospects and more volatile earnings resulting from a higher contribution from performance fees. Despite trading at the low end of its historical range at 19x 2026 price-to-earnings, the firm believes a re-rating to its average multiple of 25x would require AUM growth to return to target levels.
The stock continues to trade at a premium to the broader sector, but BofA indicated it sees "more value elsewhere with less EPS risk" following its comprehensive reassessment of Partners Group’s growth trajectory and earnings stability.
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