Stock market today: S&P 500 rides Apple-led tech rally to close higher
JPMorgan has updated its assessment of Apollo Global Management (NYSE: NYSE:APO), increasing the price target to $143.00 from the previous $129.00 while maintaining an Overweight rating on the shares.
Following Apollo's investor day, the firm's analysts expressed a more positive view, highlighting management's review of past projections, current performance, and new targets set for 2029.
During the investor day, Apollo Global Management's management team reflected on their past guidance and evaluated their performance against those benchmarks, noting that all key deliverables are tracking at or above expectations.
The company laid out new goals, including a 20% average fee-related earnings (FRE) growth and a 10% average SRE growth over the next five years, which JPMorgan views as achievable.
Apollo's management presented a vision of the company becoming more FRE-centric and discussed how it is well-positioned to capitalize on market opportunities in several large sectors.
These include the Global Industrial Renaissance, Retirement, Individuals, and the Public vs. Private markets, with total addressable markets (TAM) ranging from $45 trillion to $150 trillion.
The firm also highlighted Apollo's strong track record, citing impressive internal rates of return (IRRs) for its recent flagship equity funds. With these strong returns and significant capital returns, Apollo expects to begin fundraising for Fund XI in late 2025, aiming to surpass the size of Fund X.
In other recent news, Apollo Global Management has been the subject of several key developments. Goldman Sachs maintained its Buy rating on Apollo Global, setting a target price of $135.
The firm's endorsement followed Apollo's Investor Day presentation, which outlined five-year financial targets and a focus on growth opportunities, particularly in the alternative asset management sector.
Apollo anticipates fee-related earnings growth of approximately 20% over the next five years, aiming to reach around $5.0 billion. A more robust performance income interest is also expected, leading to $15.00 of after-tax net income per share.
TD Cowen maintained its Buy rating on Apollo shares, projecting about $15.00 in after-tax net income for the year 2029, driven by quicker than expected growth in fee-related earnings.
Apollo also proposed a significant investment of up to $5 billion in Intel (NASDAQ:INTC) and initiated a strategic financing and capital markets collaboration with BNP Paribas (OTC:BNPQY), which committed an initial $5 billion in financing. Furthermore, Apollo established a $25 billion private credit and direct lending program in partnership with Citigroup Inc (NYSE:C).
InvestingPro Insights
Apollo Global Management's strong performance and positive outlook, as highlighted by JPMorgan's analysis, are further supported by recent data from InvestingPro. The company's market capitalization stands at an impressive $75.18 billion, underscoring its significant presence in the financial services industry.
InvestingPro Tips reveal that Apollo has maintained dividend payments for 14 consecutive years, demonstrating a commitment to shareholder returns that aligns with the company's focus on capital returns mentioned in the article. Additionally, the stock is trading near its 52-week high, with a robust 49.85% price total return over the past year, reflecting investor confidence in Apollo's strategy and performance.
The company's P/E ratio of 14.19 suggests a reasonable valuation, especially considering the projected growth and market opportunities outlined during the investor day. Apollo's profitability is evident, with a gross profit of $9.65 billion and an operating income margin of 22.48% for the last twelve months as of Q2 2024.
These insights complement JPMorgan's positive outlook on Apollo Global Management. For investors seeking a deeper analysis, InvestingPro offers 12 additional tips, providing a comprehensive view of Apollo's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.