Apollo Global Management Faces Investigation Amid Tax Scandal
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 07 2024
0mins
Should l Buy APO?
Apollo Global Management's stock price rose by 5.01% as it crossed above the 5-day SMA, reflecting a positive market reaction despite ongoing investigations.
The company is currently under investigation for potential securities fraud, with Pomerantz LLP representing investors concerned about corporate governance issues. Reports have surfaced regarding CEO Marc Rowan's discussions with Jeffrey Epstein about tax arrangements, contradicting previous claims of no business dealings. This situation has raised significant concerns among investors, leading to a cautious outlook on the company's reputation and future financial standing.
As the investigation unfolds, investors are advised to stay informed about potential legal actions that could impact Apollo's stock performance. The upcoming Q4 earnings report on February 9th may also influence market sentiment, as analysts anticipate a decline in earnings.
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Analyst Views on APO
Wall Street analysts forecast APO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for APO is 162.77 USD with a low forecast of 136.00 USD and a high forecast of 186.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
12 Buy
1 Hold
0 Sell
Strong Buy
Current: 126.080
Low
136.00
Averages
162.77
High
186.00
Current: 126.080
Low
136.00
Averages
162.77
High
186.00
About APO
Apollo Global Management, Inc. is a global alternative asset manager and a retirement services provider. It operates through three segments: Asset Management, Retirement Services and Principal Investing. The Asset Management segment focuses on three investing strategies: yield, hybrid, and equity. These strategies reflect the range of investment capabilities across its platform based on relative risk and return. The Retirement Services business is conducted by Athene Holding Ltd (Athene), a financial services company that specializes in issuing, reinsuring, and acquiring retirement savings products designed for the increasing number of individuals and institutions seeking to fund retirement needs. Athene product lines include annuities and funding agreements. The Principal Investing segment includes realized performance fee income, realized investment income from its balance sheet investments, and certain allocable expenses related to corporate functions supporting the entire company.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Apollo Global Management to Announce Q4 Earnings on February 9th
- Earnings Announcement: Apollo Global Management (APO) is set to release its Q4 2023 earnings report on February 9th before market open, with consensus EPS estimated at $2.04, reflecting an 8.1% year-over-year decline, and revenue expected at $1.2 billion, indicating the company's resilience amid market fluctuations.
- Historical Performance Review: Over the past two years, APO has exceeded EPS and revenue estimates 63% of the time, demonstrating reliability in financial performance and bolstering investor confidence.
- Expectation Adjustment Dynamics: In the last three months, EPS estimates have seen four upward revisions and nine downward adjustments, while revenue estimates have experienced four upward revisions and one downward, reflecting a cautious market outlook on the company's future performance.
- Market Environment Impact: Despite easing credit fears, Apollo Global's stock price faces limited upside potential, indicating a cautious market sentiment regarding its future growth prospects.
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- Declining Private Equity Deal Volumes: Morgan Stanley noted that technology services deal volumes account for nearly 21% of overall private equity activity, with TPG, Carlyle, and KKR slightly above this level, indicating weakened market confidence in software-related investments.
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Apollo Global Management to Announce Q4 Earnings on February 9th
- Earnings Announcement: Apollo Global Management (APO) is set to release its Q4 2023 earnings report on February 9th before market open, with consensus EPS estimated at $2.04, reflecting an 8.1% year-over-year decline, and revenue expected at $1.2 billion, indicating the company's resilience amid market fluctuations.
- Historical Performance Review: Over the past two years, APO has exceeded EPS and revenue estimates 63% of the time, demonstrating reliability in financial performance and bolstering investor confidence.
- Expectation Adjustment Dynamics: In the last three months, EPS estimates have seen four upward revisions and nine downward adjustments, while revenue estimates have experienced four upward revisions and one downward, reflecting a cautious market outlook on the company's future performance.
- Market Environment Impact: Despite easing credit fears, Apollo Global's stock price faces limited upside potential, indicating a cautious market sentiment regarding its future growth prospects.
See More
Key Earnings Reports and Economic Outlook This Week
- DuPont Earnings Expectations: DuPont is expected to report earnings of $0.43 per share and revenue of $1.69 billion for Q4 2025, with analysts noting ongoing pressure in short-cycle businesses, while slight improvements in the automotive sector may influence investor sentiment.
- Cisco's AI Focus: Cisco anticipates earnings of $1.02 per share and revenue of $15.1 billion for Q2 FY2026, with CEO highlighting a major multi-year campus networking refresh, making AI infrastructure demand a critical growth driver.
- Importance of Employment Report: The January employment report is expected to show an addition of 80,000 nonfarm payrolls and an unchanged unemployment rate of 4.4%, directly impacting private consumption and U.S. GDP, making it crucial for investors to monitor.
- Consumer Price Index Insights: The January CPI is projected to increase by 2.5% year-over-year, with core CPI rising by 2.6%, providing essential inflation details despite not being the Fed's preferred measure, particularly regarding persistent shelter cost inflation.
See More
Key Focus Areas This Week: Jobs, Consumer Prices, Coca-Cola, CVS, Ford, McDonald's, and More
- Market Performance: The Dow Jones Industrial Average rose by 2.5% and closed above 50,000 for the first time.
- Nasdaq Struggles: In contrast, the Nasdaq Composite ended the week down 1.8%, despite a strong rally on Friday.
See More
Next Week's Market Focus: Super Bowl and Earnings Reports
- Super Bowl Event: This Sunday, the Patriots will face the Seahawks in Super Bowl LX, expected to attract a large audience and boost related advertising revenues, further solidifying the significance of sporting events in the market.
- Earnings Season Arrives: Companies like Coinbase, Ford, McDonald's, and Moderna will report earnings next week, with analysts focusing on McDonald's same-store sales, which are expected to rise due to promotional activities, reflecting consumer demand for value products.
- Economic Data Release: The delayed January jobs report will be released on Wednesday, with economists forecasting the addition of 70,000 jobs in the U.S., providing the market with the latest dynamics on the labor market.
- Inflation Indicator Focus: The Consumer Price Index (CPI) will be released on Friday, with the market closely monitoring this key indicator's impact on future economic outlook and Federal Reserve policy, potentially influencing interest rate decisions.
See More
Asset Managers Face AI-Driven Shock Amid Software Selloff
- Market Capitalization Loss: The software sector's selloff has wiped out nearly $1 trillion in market capitalization, leading the Dow Jones US Asset Managers Index to decline nearly 5% this week, reflecting investor concerns over loan and leverage exposure.
- Declining Private Equity Deal Volumes: Morgan Stanley noted that technology services deal volumes account for nearly 21% of overall private equity activity, with TPG, Carlyle, and KKR slightly above this level, indicating weakened market confidence in software-related investments.
- Rising Loan Risks: Software borrowers are shouldering an average debt-to-EBITDA ratio of 7.4 times, significantly higher than the 5.9 times average across a $1 trillion loan pool studied by KBRA, highlighting the private credit market's heavy reliance on the software sector and its associated risks.
- Portfolio Review: Companies like Ares and KKR are reviewing their portfolios to assess the impact of AI on their software investments, demonstrating a cautious approach among asset managers in the face of market volatility.
See More
The Impact of Software Concerns on Private Credit and Recommended BDC Stocks to Consider
- Private Credit Sector: The emergence of private credit "cockroaches" indicates a shift in the market, particularly affecting the software sector.
- Investment Opportunities: This situation may present new investment opportunities in shares of business development companies that hold the debt of these affected companies.
See More
