Piper Sandler maintains Apollo Global stock with $202 target

On Tuesday, Piper Sandler reiterated its Overweight rating on Apollo Global Management (NYSE:APO) with a steadfast $202.00 price target. Noah Gunn, the Global Head of Investor Relations at Apollo, represented the firm in recent investor meetings, underscoring the company’s recent addition to the S&P 500 index. Despite the volatility in the market, Piper Sandler’s analysts remain optimistic about Apollo’s ability to leverage its full-stack asset and liability origination capabilities to benefit from the current market dislocations.

Apollo Global Management’s stock has experienced fluctuations against a backdrop of increased market dislocation, with a -8.64% return over the past week and -23.49% year-to-date. However, Piper Sandler believes that the company’s position enables it to capitalize on such dislocations. Since the 2016 IPO of Athene, there have been concerns about late-cycle credit, but Apollo has demonstrated the capacity to use volatility to its advantage, growing significantly at times. The analysts suggest that Apollo’s balance sheet plays a crucial role in this growth, supported by a healthy current ratio of 1.51 and 15 consecutive years of dividend payments.

The firm’s execution on strategies such as industrial renaissance, retirement solutions, and the evolving dynamics of public versus private investments are expected to reveal pathways to achieve 10% spread-related earnings (SRE) and 20% fee-related earnings (FRE) growth. This, in turn, is anticipated to result in above-peer earnings per share (EPS) growth. The company’s current diluted EPS stands at $7.33, with analysts forecasting EPS of $8.96 for FY2025.

The analysts also find Apollo Global Management’s shares to be attractively valued, citing a 12.5x multiple on estimated 2026 earnings. The stock currently trades at a P/E ratio of 16.87, with InvestingPro analysis suggesting the stock is currently undervalued. This valuation is seen as favorable, especially considering the company’s prospects for earnings growth and its strategic positioning in the current economic cycle. Apollo Global Management’s focus on diversifying its offerings and capitalizing on market volatility has positioned it favorably in the eyes of Piper Sandler analysts, who expect these factors to drive the company’s performance going forward.For detailed valuation metrics and additional insights, investors can access the full Apollo Global Management Pro Research Report on InvestingPro, which includes comprehensive analysis of the company’s financial health and growth prospects.

In other recent news, Apollo Global Management is reportedly in discussions to lead a $35 billion financing package for Meta Platforms (NASDAQ:META), aiming to support the development of data centers across the United States. This potential deal is still in the preliminary stages, and its finalization remains uncertain. Additionally, Apollo has announced executive changes, with Louis-Jacques Tanguy stepping down as Chief Accounting Officer to take on a new role at Athene Holding (NYSE:ATH), while Martin Kelly temporarily assumes Tanguy’s responsibilities. In the realm of mergers and acquisitions, Apollo is among the shortlisted bidders for Reckitt Benckiser (LON:RKT)’s homecare brands, which are expected to sell for between £4 billion and £5 billion.

Moreover, Keefe, Bruyette & Woods has maintained an Outperform rating on Apollo’s stock, with a price target of $194, following Apollo’s acquisition of BRDG. This acquisition is projected to slightly increase Apollo’s 2025 pre-tax Adjusted Net Income per share and enhance its Fee-Related Earnings. In another strategic move, Apollo’s affiliate Redding Ridge Asset Management is set to acquire Irradiant Partners, significantly boosting its assets under management to $38 billion. This acquisition will position Redding Ridge as a top five manager in collateralized loan obligations. These developments highlight Apollo Global Management’s ongoing efforts to expand and diversify its portfolio.

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