On Wednesday, JPMorgan (NYSE:JPM) adjusted its outlook on Partners Group Holding AG (PGHN:SW) (OTC: PGPHF), increasing the price target to CHF1,252 from CHF1,097. The firm maintained a Neutral rating on the stock. The revision follows the company's full year 2023 results, which prompted the analyst to update their estimates.
The new price target represents a 14% increase, attributed mainly to a higher Price/Funds from Operations (P/FRE) multiple of 28x, up from the previous 25x. This change comes in the wake of a recent sector rerating, which has affected the valuation metrics.
The analyst noted a downward revision of the 2024 estimated adjusted earnings per share (EPS) by 7%, citing a more conservative guidance by Partners Group's management. The expected performance fees and revenues for 2024 have been adjusted to 21%, a decrease from the prior estimate of 27%.
Despite the reduced forecast for 2024, the estimates for the 2025-26 adjusted EPS have been increased by approximately 6% on average. This uptick is driven by higher anticipated management fees, which are supported by an updated Assets under Management (AuM) forecast. The new AuM forecast includes an estimated annual market performance of around 8% on evergreen funds.
The analyst reiterated their Neutral recommendation on Partners Group shares, indicating a stance of watchful monitoring of the company's performance and market position following the recent financial results and management guidance.
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