Apollo Unveils Growth Plan & 5-Year Financial Target, Stock Rises 5.7%
At Investor Day Conference held on Oct. 1, 2024, Apollo Global Management Inc. APO outlined its business strategy and financial goals for the next five years. The company’s senior management team discussed its strategic positioning and plan to continue delivering attractive returns to shareholders.
Marc Rowan, chief executive officer of Apollo, said, “In an industry where we believe the capacity to originate good assets is the key to success, Apollo is playing to win. Our entire industry is supported by powerful tailwinds that support robust growth over the next five years. Apollo is uniquely positioned given our focus on origination, expansive credit franchise and retirement services leader, Athene.”
Following this, shares of APO rose 5.7% in yesterday’s trading session.
APO’s Five-Year Growth Strategy & Targets
Fee-related earnings (FRE) are expected to witness a 20% average annual growth by 2029, while spread-related earnings (SRE) are projected to witness a 10% average annual growth by 2029.
Management projected approximately $15.00 in after-tax net income (ANI) per share for 2029.
By 2029, Apollo expects to grow its total assets under management (AUM) to nearly $1.5 trillion by scaling its private equity business.
Equity AUM
Equity AUM is expected to double in the next five years to reach $270 billion.
Growth in Equity AUM with Upside
Image Source: Apollo 2024 Investor Day Presentation
Private Lending Business
The company has set a massive new goal to double its $562 billion private lending business in five years.
Scaling in Credit
Image Source: Apollo 2024 Investor Day Presentation
Global Wealth Management Business
The company expects to expand its Global Wealth Management business to more than $150 billion by 2029.
Scaling Global Wealth Management Business
Image Source: Apollo 2024 Investor Day Presentation
Growing Originations
APO’s management has set a five-year target, inclusive of all Origination, both debt origination and equity origination, of more than $275 billion.
Origination Trend
Image Source: Apollo 2024 Investor Day Presentation
Capital Expenditure
Apollo expects to generate $21 billion capital in the next five years.
Capital Generation & Utilization
Image Source: Apollo 2024 Investor Day Presentation
Parting Thoughts on APO
Apollo, with approximately $696 billion in assets under management as of June 30, 2024, operates across a fully integrated platform, offering a range of investment strategies from investment grade to private equity.
The combination of the aforementioned financial goals and strategic plans is expected to evoke a positive response from the investors. The forecast of $15 ANI per share for 2029 illustrates Apollo's strong growth trajectory, notably in fee-related earnings, which are expected to increase faster than previously estimated.
The overall financial picture provided by Apollo's management during the Investor Day indicates a positive outlook for the company's financial health in the following years. This long-term approach is expected to be favorably accepted by investors and stakeholders who monitor Apollo's performance and strategic direction.
APO Zacks Rank and Price Performance
In the past six months, shares of APO have risen 18.2% compared with the industry’s growth of 13.8%.
Six-Months Price Performance
Image Source: Zacks Investment Research
Currently, the company carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Some better-ranked stocks from the same space are Janus Henderson Group plc JHG and BlackRock Inc. BLK.
Earnings estimates for JHG for the current year have been revised 5.2% upward over the past 60 days. The company’s share price has increased 19.3% in the past six months. Currently, JHG sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Estimates for BLK’s current-year earnings have risen nearly 1% in the past month. The company’s shares have jumped 16.1% over the past six months. At present, BLK carries a Zacks Rank #2.
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