The Carlyle Group LP (CG) PT Lowered to $55 at Deutsche Bank

Deutsche Bank analyst Brian Bedell lowered the price target on The Carlyle Group LP (NASDAQ: CG) to $55.00 (from $63.00) while maintaining a Buy rating.

The analyst comments "Headline 1Q24 DE/sh was $1.01 though we view core DE/sh at $0.94, vs. the $0.97 we pointed to in our initial take (link: 1Q24 initial take) after backing out our estimate of ~$15mn pre-tax (~$12mn a-t) of one-time items that benefited global PE G&A expense. This also drives our view of core pre-tax FRE/sh of $0.70 vs. $0.74 reported, or 2 cents below DB and Consensus. On the earnings call, the three key financial targets for 2024 mgmt issued with 4Q earnings each remain on track from mgmt's perspective: a) $1.1bn pre-tax FRE target; b) a 40-50% FRE margin target; and c) fundraising of $40bn. This said, 1Q's results drove several questions, particularly around the ability to meet the full year $40bn fundraising target after just $5.3bn was raised in 1Q. Mgmt emphasized that it expects to meet the $40bn target, noting strength in asset-based finance (ABF), secondaries, retail products, along with some areas in private equity, although no color was given on the quarterly trajectory during the year. While the reported margin at 46.6% was solid, after backing out our estimate of one-time global PE G&A benefits, we arrive at a 44.0% margin, in between DB and Consensus, but not as the reported results."

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