Down 34% In Last 12 Months, Can KKR Stock Deliver Strong Returns in 2026?

Key Takeaways:

• Record Fundraising: KKR raised $129 billion in 2025, nearly double its 2023 total, driven by diversified growth across private equity, credit, and infrastructure.
• Price Projection: Based on current execution, KKR stock could reach $139 by December 2028.
• Potential Gains: This target implies a total return of 59% from the current price of $88.
• Annual Return: Investors could see roughly 18% growth over the next 2.8 years.

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KKR & Co. Inc. (KKR) reported strong fourth quarter 2025 results with fee-related earnings of $1.08 per share and total operating earnings of $1.42 per share.

The firm demonstrated momentum across its three growth engines: asset management, insurance, and strategic holdings.

• Management fees grew 24% year-over-year to $1.1 billion in Q4, driven by successful fundraising and deployment activity.
• For the full year 2025, management fees reached $4.1 billion, with private equity, real assets, and credit each contributing approximately one-third of total fees.
• The company’s fee-related earnings margin remained healthy at 68% for the quarter and 69% for the full year.
• More importantly, KKR continues building durable earnings streams, with recurring earnings representing 85% of total pretax segment earnings over the last 12 months.

Co-CEO Scott Nuttall emphasized the firm’s strong positioning despite market volatility.

The company’s $118 billion of dry powder provides significant capacity to capture investment opportunities, particularly as market dislocations create attractive entry points across global markets.

KKR’s recent acquisition of Arctos for $1.4 billion in equity adds a new KKR Solutions vertical focused on sports, GP solutions, and secondary strategies.

Management expects this business to reach over $100 billion in AUM over time and become a meaningful contributor to earnings.

Despite delivering record fundraising and maintaining strong investment performance across asset classes, KKR trades at $88, offering compelling upside for investors who recognize the firm’s diversified business model and global platform advantages.

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What the Model Says for KKR Stock

We analyzed KKR as it evolved into a diversified alternative asset manager with three distinct growth engines working in tandem.

The company benefits from structural tailwinds in private markets. Institutional investors continue to consolidate relationships with fewer, more trusted partners.

This trend accelerates KKR’s market share gains, particularly given its differentiated investment performance and ability to return capital to limited partners.

KKR’s management fee growth trajectory remains strong.

• The firm raised $129 billion in 2025, the highest in its 50-year history.
• This capital will convert to fee-paying AUM over time, providing visibility into future revenue growth.
• Credit raised a record $68 billion, infrastructure AUM has grown from $17 billion five years ago to around $100 billion today, and private wealth channels delivered $16 billion through K-Series products.
• The insurance segment through Global Atlantic provides additional upside.
• While reported insurance operating earnings were $268 million in Q4, management noted this would have been approximately $100 million higher if the portfolio was marked to market rather than cash accounted.
• The embedded profitability from alternative investments will translate into cash earnings as these positions mature.

Using a forecast of 22.9% annual revenue growth and 77.7% operating margins, our model projects the stock will rise to $139 within 2.8 years. This assumes a 12x price-to-earnings multiple.

That represents compression from KKR’s historical P/E averages of 21.5x (one year) and 18.2x (five years).

The lower multiple reflects near-term market anxiety around AI disruption and broader economic uncertainty, despite KKR’s minimal direct exposure to vulnerable software investments.

The real value lies in capturing KKR’s ability to deploy capital at attractive returns during periods of market dislocation while scaling its fee-generating platform across global markets.

Our Valuation Assumptions

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Our Valuation Assumptions

TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.

Here’s what we used for KKR stock:

1. Revenue Growth: 22.9%

KKR’s revenue growth centers on converting record fundraising into management fees.

• The firm has already raised over $240 billion toward its $300+ billion target for the 2024-2026 period, with momentum continuing into 2026.
• Management expects to meaningfully exceed FRE per share targets, driven by scaling management fees and improving operating leverage.
• Capital markets fees show expansion potential, particularly as the firm generates hundreds of millions annually from insurance-related financing activity.
• The Arctos acquisition immediately adds $15 billion in AUM, with long-duration capital with no fixed end date.

Combined with continued growth in private wealth channels and international deployment opportunities, double-digit revenue growth appears sustainable.

2. Operating margins: 77.7%

KKR has demonstrated exceptional cost discipline as it scales the business.

From the end of 2022 through September 2025, management fees grew by 46%, while operating expenses increased by only 21%.

This compares favorably to peers who generally grew expenses faster than revenues.

The firm maintains fee-related compensation at 17.5% and continues finding opportunities for operating leverage through technology adoption and AI-driven efficiency improvements across its 200+ portfolio companies.

3. Exit P/E Multiple: 12x

The market currently values KKR at 13.4x earnings.

We assume modest compression to 12x over our forecast period, reflecting continued uncertainty in public markets.

This conservative multiple accounts for near-term volatility while recognizing KKR’s improving earnings quality.

As recurring earnings from insurance, strategic holdings (targeting $350+ million in 2026), and management fees increase as a proportion of total earnings, the firm should command a premium valuation.

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What Happens If Things Go Better or Worse?

Alternative asset managers face fundraising cycles and monetization timing uncertainty. Here’s how KKR stock might perform under different scenarios through December 2030:

• Low Case: If revenue growth moderates to 16.3% and net income margins compress to 57.3%, investors still see a 67% total return (11% annually).
• Mid Case: With 18.1% growth and 60.3% margins, we expect a total return of 115% (17% annually).
• High Case: If deployment and fundraising momentum accelerate to 19.9% revenue growth while KKR maintains 62.7% margins, returns could hit 169% total (23% annually).

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The range reflects execution on global deployment opportunities, success monetizing the $19 billion of embedded gains, and the ability to scale new business lines like KKR Solutions while maintaining cost discipline.

In the low case, monetization activity slows due to market conditions, or fundraising moderates from record levels in 2025.

In the high case, market volatility creates exceptional vintage-year returns, insurance economics accelerate, and strategic holdings exceed $350 million in operating earnings ahead of schedule.

How Much Upside Does KKR Stock Have From Here?

With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.

All it takes is three simple inputs:

• Revenue Growth
• Operating Margins
• Exit P/E Multiple

If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.

From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!