Barclays maintains an overweight position on Apollo with a price target by Investing.com
Barclays reiterated its Overweight rating on Apollo Global Management (NYSE: ) with an unchanged target price of $128.00. The company is focused on the upcoming 2024 investor day hosted by Apollo on October 1, where they expect the company to present updated mid- and long-term goals. Key areas of interest include assets under management (AUM) across various categories, third-party fundraising efforts, and a range of financial metrics such as fund-related earnings (FRE), FRE growth, seed revenue (SRE), investment revenue of permanent funds. (PII), and adjusted income.
Additionally, the financial institution looked to understand Apollo's revenue strategies in its Capital Solutions segment, FRE margin, compensation ratios, operating ratio, and details of Athene's invested assets and income. Capital allocation and annual origin figures are also points of interest. With Apollo recently revising its FY24 SRE growth guidance from low double-digit to mid-single-digit growth, there is heightened investor focus on Athene's growth prospects, particularly in terms of spreads, flows, and capital.
Barclays is also keen to gain insight into Apollo's strategic initiatives, such as its fixed income diversification strategies and growth plans in the retail market, including the implications of offering funds to exchange-traded funds (ETFs). While the company expects medium-to-young annual growth rates (CAGRs) for AUM and FRE, as well as low double-digit growth in SRE, they also note the possibility that Apollo will reveal more obscure growth drivers at the upcoming event. However, Barclays expects a slight increase in long-term growth in Apollo's Capital Solutions segment compared to Street's FY26 expectations, due to the importance of emerging debt.
In other recent news, Apollo Global Management has taken significant stakes in several key financial businesses. This company recently partnered with him Citigroup Inc (NYSE:). establishing a $25 billion private credit and direct lending program, a move that marks the financial sector's growing interest in the $2 trillion private credit market. The business includes Mubadala Investment Company and Athene, Apollo's annuity, and retirement services unit. The program is designed to help borrowers who are considered too risky for conventional bank loans, which are often used to make large sums of money.
In addition to this, Apollo Global Management has proposed a major investment of up to $5 billion in Intel (NASDAQ: ), the semiconductor giant. However, the negotiations are in the early stages and there is no guarantee that they will lead to a finalized agreement. This development follows Apollo's previous announcement of plans to acquire a 49% stake in a joint venture linked to Intel's new manufacturing facility in Ireland.
In addition, Apollo announced a financial strategy and capital markets partnership with BNP Paribas (OTC:). A leading global bank has committed $5 billion in financing to support investment-grade, asset-backed credit from Apollo and ATLAS, Apollo's crowd-sourced warehouse and secured products business. This partnership is expected to increase the security experienced by Apollo clients and ATLAS issuers.
Apollo's recent activities have received positive feedback from several firms. Wolfe Research initiated coverage on shares of Apollo with an Outperform rating, noting the company's strong position in the Private Credit and Fixed-Deferred Annuity markets. Citi and TD Cowen maintained their Buy ratings on Apollo, while BofA Securities upgraded Apollo stock from Neutral to Buy.
InvestingPro Insights
As we await Apollo Global Management's Investor Day, InvestingPro's current data and insights provide a context for evaluating the company's performance and potential. With a strong market capitalization of $71.48 billion, Apollo is a key player in the financial services industry. The company's P/E ratio sits at 13.48, indicating investors' valuation of its earnings. Notably, Apollo stock was trading near its 52-week high, with the price at 98.87% of this peak, indicating strong market confidence.
InvestingPro Tips highlights that Apollo has maintained dividend payments for 14 consecutive years, demonstrating its commitment to shareholder returns. This is further reinforced by a 1.47% dividend yield and a 7.56% growth rate in dividends over the past twelve months from Q2 2024. Additionally, the company's liquid assets exceed its short-term liabilities, suggesting financial stability and stability.
For investors looking for a comprehensive analysis, InvestingPro offers additional tips that examine Apollo's financial health and market conditions. With Apollo's strategic plans and financial metrics on the horizon, this information can help frame expectations and investment decisions.
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