CVC Capital Partners Is oversold, says Morgan Stanley

Investing.com -- Morgan Stanley upgraded CVC Capital Partners (WA:CPAP) to Overweight from Equal-weight in a note Friday, lifting its price target for the stock.

The bank’s analysts highlighted improving carry fee trends, easing macro uncertainty, and strong positioning in growth areas such as infrastructure, secondaries, and credit.

“CVC shares are down more than 20% year-to-date versus [the] European and global sector average ~5%,” Morgan Stanley (NYSE:MS) noted. 

“We see scope for a catch-up given reassuring messaging on carry combined with a high-quality franchise positioned for industry growth zones,” they added.

The bank’s price target for CVC was increased to €20 from €15, a 33% increase, as it boosted its EPS forecasts by 2% to 8% for 2025–2027. 

Analysts cited “increased carry fees following a reassuring 1Q25 message that saw management reiterate a material improvement year over year in 2025, even if well below mid-term target levels.”

Morgan Stanley said the “tariff de-escalation suggests we have passed the worst of market upheaval,” and it expects a “gradual improvement in capital markets,” although it acknowledged that macro uncertainty remains elevated.

CVC’s strategy to scale its infrastructure, credit, and secondaries platforms was highlighted as a core strength. 

“We see CVC’s top-tier PE franchise as well placed to consolidate market share in the more mature PE segment,” the note said. Analysts also pointed to “strong LP relationships and cross-sell potential” that could drive further growth across product lines.

The firm also cited early signs of success in its wealth-focused Evergreen credit and private equity products. 

“Wealth allocation growth theme offers upside optionality to growth if well executed,” Morgan Stanley said.

While risks remain, Morgan Stanley believes CVC’s current valuation and strategic positioning make it an attractive investment: “YTD underperformance offers an appealing entry.”