Morgan Stanley analyst Michael Cyprys maintained a Hold rating on Apollo Global Management (APO – Research Report) yesterday and set a price target of $170.00.
Michael Cyprys has given his Hold rating due to a combination of factors surrounding Apollo Global Management’s recent acquisition of Bridge Investment Group. The acquisition, valued at $1.5 billion in an all-stock transaction, is set to enhance Apollo’s real estate capabilities significantly by adding approximately $33 billion in assets under management to its existing platform. While the deal is expected to be accretive to Apollo’s financial metrics, such as a 5% increase in FRE per share and a 2% boost in EPS, Cyprys remains cautious.
The valuation of the acquisition, with multiples of 12x FRE and 11x EBITDA, aligns with historical deal metrics but does not present a compelling enough upside to warrant a more bullish rating. Additionally, while the acquisition is poised to enhance Apollo’s origination capabilities and could benefit Athene through potential synergies, the overall impact on Apollo’s financial performance remains to be fully realized. Therefore, Cyprys recommends a Hold rating, suggesting investors should maintain their current positions while monitoring the integration and performance outcomes of the acquisition.
In another report released on February 13, Jefferies also maintained a Hold rating on the stock with a $163.00 price target.