X
<

Carlyle's 1Q17 Performance Recap: Navigating Volatility

PART:
1 2 3 4 5 6 7 8
Part 7
Carlyle's 1Q17 Performance Recap: Navigating Volatility PART 7 OF 8

Can Carlyle Recover from Its Discounted Valuation?

Discounted valuations

Carlyle Group’s (CG) one-year forward PE (price-to-earnings) ratio stands at 7.58x, as compared to the peer average of 9.74x. Carlyle is now trading at a discount to its peers due to losses realized in the company’s Hedge Fund Solutions and GMS (Global Market Strategies) segments. Lower-than-expected performances in real estate credit and opportunistic credit have driven this discount in valuations.

CG is expected to recover in coming quarters, however, mainly due to its expected improved performance in its Private Equity segment, backed by a positive and favorable fundraising environment. In 2H17, a significant amount of fundraising is expected of CG, and this should improve the company’s valuation.

Can Carlyle Recover from Its Discounted Valuation?

Interested in CG? Don't miss the next report.

Receive e-mail alerts for new research on CG

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

On a pre-tax basis, the company reported DE (distributable earnings) of $55 million in 1Q17, as compared to $128.6 million in 1Q16. Blackstone’s (BX) one-year forward PE ratio stands at 10.99x, while its trailing PE ratio stands at 15.72x. Below are CG’s peers’ one-year forward PE ratios:

  • Apollo Global Management (APO): 10.85x
  • KKR (KKR): 8.83x
  • Alliance Bernstein (AB): 10.47x

Expected valuations

CG has a positive outlook of its valuations due to the recent improvements its seeing in the economy and the performance of its portfolio companies. Carlyle saw higher numbers in fee-related earnings in its GMS segment, for example, reporting $3 million in 1Q17, as compared to -$1 million in 1Q16.

Notably, Blackstone (BX), Apollo Global Management (APO), and KKR (KKR) together account for 4.67% of the PowerShares Global Listed Private Equity ETF (PSP).

X

Please select a profession that best describes you: