Merrill Lynch Turns Bullish On Carlyle, Sees 25% Upside

Stock Market

Merrill Lynch upgraded Carlyle’s rating to Buy from Hold and raised the stock’s price target to $35 (25.3% upside potential) from $30.

Merrill Lynch analyst Michael Carrier said that “We believe the outlook for CG is attractive given the potential for FRE [fee-related earnings]/margin growth in 2H21-’23 as flagship funds re-enter the market, an improving perf fee backdrop driven by a healthy net accrued balance and the continued scaling and increasing profitability of the Investment Solutions (IS) & Credit businesses.”

On Oct. 29, Carlyle Group (CG) reported stronger-than-expected 3Q results. Its EPS of $0.40 beat analysts’ estimates of $0.35. Moreover, its revenues of $1.03 billion also came ahead of the Street consensus of $489.8 million.

Carlyle CEO Kewsong Lee said, “The resilience of our global platform and strong investment performance of our funds positions us to deliver attractive financial results for our shareholders this year and over the long term.” (See CG stock analysis on TipRanks)

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Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 3 Buys and 3 Holds. The average price target stands at $33.92 and implies upside potential of about 21.4% to current levels. Shares were down by about 12.9% year-to-date.

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