KKR Shares Decline Despite Strong EPS Growth Expectations

KKR's strong EPS growth projected at 33.1% contrasts with a recent share decline. The investment firm beat Q4 estimates even as revenue saw a significant drop, raising concerns for investors.

Date: 12-02-2025

AI Rating: 6

Overview of KKR's Financial Performance: KKR & Co. Inc. has a notable market capitalization of $131.4 billion and has shown strong performance over the past year, with a 46.8% increase in shares compared to the S&P 500's 20.7% gain. However, the company has seen a decline of 3.7% year-to-date, which is slightly worse than the S&P 500’s 3.2% gain.

Earnings Per Share (EPS): KKR reported an adjusted EPS of $1.32, exceeding analysts' expectations. For the fiscal year ending December 2025, EPS is projected to grow significantly at 33.1% year-over-year, reaching $5.19. This positive EPS growth may bolster investor confidence and influence stock valuation positively.

Revenue Insights: KKR reported revenue of $3.3 billion, but this was accompanied by a concerning 26.4% year-over-year decline in adjusted revenue. This significant drop overshadows the positive EPS report and raises concerns about future growth potential. The combination of rising expenses and operational pressures led to this revenue decline, affecting overall profit margins.

Market Reaction: Despite beating EPS expectations, KKR shares fell by 8.5% on Feb. 4 due to the drop in revenue, lack of forward guidance, and concerns regarding margins and unrealized investment income volatility. This sharp sell-off reflects investors' apprehensions regarding the firm's future earnings capability.

Consensus Rating: The consensus among the 18 analysts covering KKR remains strong, with a “Strong Buy” rating supported by 14 “Strong Buy” ratings and only a few “Hold” positions. This indicates that the market still sees long-term value in KKR despite recent fluctuations.

Price Targets: Analysts have set a mean price target of $172.37, with a Street-high target of $214, suggesting a significant potential upside of 50.2%. This optimism could attract investors looking for growth opportunities.

Stocks: KKR