On Monday (NASDAQ:MNDY), Oppenheimer, a prominent investment firm, adjusted its outlook on The Carlyle Group LP (NASDAQ:CG), raising the investment company's price target from $78.00 to $85.00. The firm continues to endorse an Outperform rating for Carlyle Group's shares.
The adjustment follows a period of challenges for Carlyle, which has shown signs of progress under the leadership of CEO Harvey Schwartz, who has been at the helm for approximately 18 months.
In the third quarter of 2024, Carlyle reported earnings, investment performance, and fundraising that were all in line with market expectations. A particular highlight for the firm was the significant growth in its net accrued carry receivable. After-tax distributable earnings (DE) per share for Carlyle stood at $0.95, surpassing both Oppenheimer's estimate of $0.84 and the consensus estimate of $0.88. This beat was attributed mainly to a tax benefit that the company received.
On a pre-tax basis, Carlyle's DE reached $367 million, which was slightly higher than Oppenheimer's projection of $361 million. The company's financial results reflect a steady pace of improvement and suggest that the measures taken by the current CEO are having a positive impact on the firm's performance.
Oppenheimer's revised price target indicates a confidence in Carlyle Group's trajectory and potential for continued growth. The Outperform rating suggests that the investment firm believes Carlyle's stock will perform better than the overall market or its sector in the near future.
Investors and market watchers may view this updated price target as a sign of Carlyle Group's resilience and potential for growth, despite the challenges it has faced in recent years. The company's steady progress and favorable earnings report contribute to a more optimistic outlook from analysts and may influence investor sentiment going forward.
In other recent news, The Carlyle Group reported a strong performance in its third-quarter earnings. The firm's fee-related earnings (FRE) saw a significant 36% year-over-year increase to $278 million, setting a new record with a 47% FRE margin. Carlyle Group is progressing steadily towards its $1.1 billion annual FRE target, backed by $9 billion in new capital raised in the quarter and a total of $43 billion over the past year. The firm's assets under management have reached a record high of $447 billion, primarily due to substantial inflows in its Global Wealth segment.
In addition to these financial highlights, Carlyle Group underscored its commitment to enhancing shareholder value, with $150 million in shares repurchased in Q3, bringing the total to $480 million for the year. The company's management conveyed confidence in the firm's momentum and its potential for future growth, given its focus on organic growth, capital allocation, and strategic partnerships.
Analysts anticipate continued growth in fundraising and management fees, and a positive market response post-election is expected to boost CEO confidence and M&A activity. Furthermore, there is strong momentum expected in Q4 fundraising, particularly in credit markets. These are recent developments that indicate a robust outlook for the firm.
InvestingPro Insights
The Carlyle Group's recent performance aligns with Oppenheimer's optimistic outlook. InvestingPro data reveals a robust revenue growth of 104.78% over the last twelve months as of Q3 2024, with quarterly revenue growth reaching an impressive 319.24% in Q3 2024. This exceptional growth trajectory supports the positive sentiment expressed in Oppenheimer's analysis.
The company's market capitalization stands at $18.72 billion, reflecting its significant presence in the investment management industry. Carlyle's P/E ratio of 160.08 suggests investors are willing to pay a premium for its shares, possibly due to strong growth expectations.
InvestingPro Tips highlight that Carlyle has a high return on invested capital, indicating efficient use of funds to generate profits. Additionally, the company has raised its dividend for 2 consecutive years, which may appeal to income-focused investors. These insights, along with 11 additional tips available on InvestingPro, provide a comprehensive view of Carlyle's financial health and market position.
The company's next earnings date is set for February 5, 2025, which will be a crucial event for investors to gauge the continued success of CEO Harvey Schwartz's leadership and the firm's overall performance.
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