What Are KKR’s Valuations Leading Up to Its 1Q18 Results?



Discounted valuations

KKR & Company (KKR) has discounted valuations. Its PE (price-to-earnings ratio) on a next-12-month basis stands at 8.81x compared to its competitors’ average of 19.28x. 

The company’s competitors Brookfield Asset Management (BAM), CBRE Group (CBG), and Ameriprise Financial (AMP) have next-12-month PEs of 32.41x, 15.04x, and 10.40x, respectively.

KKR currently has lower valuations mainly due to the expected performances of its Private Markets and Public Markets segments in 1Q18. The company’s Private Markets segment could be negatively affected by the weak performance of the S&P 500, while its Public Markets segment is expected to be negatively affected by expected rate hikes in 2018.

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What could revive KKR’s valuations?

KKR could see a revival in its valuations now that it’s entered into a partnership with Qui! Group to target international markets. Moreover, Qui! Group will be working in the financial technology sector, which currently has a wide scope. If Qui! Group is successful in attracting the attention of an international audience, KKR will also benefit, thus helping it revive its valuations.

KKR has a trailing-12-month PE of 10.40x. Its peers (XLF) Brookfield Asset Management (BAM), CBRE Group (CBG), and Ameriprise Financial (AMP) have trailing-12-month PEs of 86.55x, 19.18x and 13.79x, respectively.


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