By Bill Alpert

As the big private asset managers begin reporting year-end results, Morgan Stanley analysts will be looking for two things.

Earnings at Blackstone, KKR & Co. and their peers increasingly rely on funds that generate steady fees, so analyst Michael Cyprys wants to hear about their fund-raising. He will also listen for the outlook on capital markets, which have perked up lately and could help private-equity firms do more deals.

"These managers stand to benefit from a re-energized deal environment, better monetization visibility, and a return to more normalized performance fee generation that will lift earnings," wrote Cyprys in a Tuesday preview of the sector's earnings.

The analyst's forecasts for December quarter earnings are slightly above the Wall Street consensus for the private managers. His report raises his price targets on most of the names he covers, seeing upside of between 25% to 45% in the stocks he rates as Buys. They are: Blackstone, KKR, Apollo Global Management, and the Canada-based real asset manager Brookfield Corp.

Blackstone will be the first of those to report, on Thursday. The consensus estimates for December quarter and 2025 year earnings are $1.51 a share and $5.32, respectively. Cyprys thinks the December number could be $1.57, bringing the year to $5.38. The quarter's fund-raising was probably stronger than Wall Street predicts, he says, and could have pulled in more than $55 billion in new money.

At its recent price of $148, Blackstone trades at 33 times its core fee-related earnings. That is slightly above its historic average. Still, Cyprys thinks Blackstone's fees will grow better than expected, as real estate and private equity recover, and funds flow in from institutions, private wealth, and insurance annuities. He is a bit above consensus with his estimate for $6.13 a share in 2026 earnings, and thinks the stock could rise 45% to $215.

KKR reports Feb. 5, and the consensus for December quarter earnings is $1.19 a share, with $4.94 for the year. The fund manager will get lower performance fees from some Asian investors than Cyprys had expected. He took down his December forecast by 30 cents to $1.14, which leaves his 2025 year number at $4.89.

In 2026, most analysts expect a big bounce in earnings at KKR. Cyprys forecasts $6.69 a share for this year, a bit below the consensus. The stock has been knocked to an earnings multiple that is almost 30% below its historical average, because of what Cyprys says is unwarranted pessimism about private equity and credit. As those sectors regain favor, and KKR enters a new round of fund-raising, the analyst sees more than 50% upside for the $116 stock.

When Apollo reports results on Feb. 9, Cyprys and other analysts expect to see $2.01 a share for the quarter and $7.92 for the 2025 year. He forecasts a slightly above-consensus $9.36 a share in earnings for 2026.

Apollo has more of its assets in private credit these days than other big alt firms, and its shares pulled back with each bad headline. Cyprys thinks the adverse credit events have been borrower-specific and very small parts of the private credit portfolios. He says the $132 shares can rise more than 30% to his $180 price target.

Brookfield Corp. is the holding company of that Canadian manager's confusing capital structure. It owns 75% of the asset manager unit Brookfield Asset Management, but also the combine's hard assets in real estate and infrastructure. As such, Cyrpys sees Brookfield Corp. as a play on the commercial real estate recovery and the unprecedented investment in energy and data centers for artificial intelligence.

For the December quarter, he expects Brookfield Corp. to report earnings of 60 cents a share. Earnings for 2025 should come in at $2.46. For this year, he forecasts earnings of $2.89, rising strongly to $3.84 in 2027. The company's price-to-book ratio dropped down last year to just below its historic average of 2.4 times, and Cyprys thinks the stock can rise 23% to $58.

The world will need Brookfield's capital, Cyrprys writes.

"In addition to a real estate recovery, we see scope for real assets growth elsewhere, fueled by the AI revolution and data center buildout globally, which will require significant capital funding."

Write to Bill Alpert at william.alpert@barrons.com

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January 27, 2026 15:53 ET (20:53 GMT)

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