KKR Stock: Is KKR Underperforming the Financial Sector?

Valued at a market cap of $120.2 billion, KKR & Co. Inc. (KKR) is a global alternative investment firm based in New York. It specializes in private equity, credit, real assets, infrastructure, and insurance solutions.

Companies worth $10 billion or more are typically classified as “large-cap stocks,” and KKR fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the asset management industry. The company leverages deep industry expertise and global scale to drive growth and operational improvements in its portfolio companies, positioning it as one of the most prominent players in the industry.

This financial company has slipped 21.7% from its 52-week high of $170.40, reached on Jan. 31. Shares of KKR have declined 7.6% over the past three months, underperforming the State Street Financial Select Sector SPDR ETF’s (XLF) 2% rise during the same time frame.

In the longer term, KKR has fallen 14.6% over the past 52 weeks, lagging behind XLF’s 10.5% uptick over the same time frame. Moreover, on a YTD basis, shares of KKR are down 9.8%, compared to XLF’s 13.1% return. 

To confirm its recent bullish trend, KKR has been trading above its 200-day and 50-day moving averages since early December. 

On Nov. 7, shares of KKR surged 1.7% after delivering its Q3 results. The company’s total revenue improved 15.3% year-over-year to $5.5 billion. Strong growth in its insurance revenue helped offset weaker performance in asset management and strategic holdings. Moreover, its fee-related earnings reached a record $1 billion, while its assets under management increased by a notable 15.8% from the year-ago quarter to $723.2 billion. Its profitability also stood strong, with adjusted net income per share climbing 6.8% from the same period last year to $1.41, reflecting continued business expansion and strong operating performance. 

KKR has outpaced its rival, Blackstone Inc. (BX), which declined 19.3% over the past 52 weeks and 11.8% on a YTD basis. 

Despite KKR’s recent underperformance, analysts remain highly optimistic about its prospects. The stock has a consensus rating of "Strong Buy” from the 20 analysts covering it, and the mean price target of $156.47, suggests a 17.3% premium to its current price levels.