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Financial research report (morgan stanley)
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1.29 MB
Summary
This document is page 22 of a Morgan Stanley research report titled 'North America Insight,' focused on a 'Sum-of-the-Parts' (SOTP) and sensitivity analysis for Apollo Global Management (APO). It features financial models based on Q3 2017 data and 2018 estimates, projecting share prices under different scenarios, specifically regarding a potential C-Corp conversion. The document bears a 'HOUSE_OVERSIGHT' Bates stamp, indicating it was obtained as part of a congressional investigation, likely related to inquiries into Apollo's financial practices or connections.
Organizations (5)
| Name | Type | Context |
|---|---|---|
| Morgan Stanley | ||
| Apollo Global Management | ||
| APO | ||
| Thomson Reuters | ||
| House Oversight Committee |
Timeline (1 events)
2018e
Locations (1)
| Location | Context |
|---|---|
Relationships (2)
Morgan Stanley Research report analyzing Apollo (APO) valuation.
Bates stamp HOUSE_OVERSIGHT_025572 on Apollo financial document.
Full Extracted Text
Complete text extracted from the document (2,210 characters)
Morgan Stanley | RESEARCH
NORTH AMERICA INSIGHT
NORTH AMERICA INSIGHT
Apollo Global Management SOTP and Sensitivity Analysis
Exhibit 30:
SOTP for APO
Apollo Global Management (APO)
SOTP for APO
Apollo Global Management (APO)
Sum-of-the-Parts Components (APO) | Current Price SOTP | Downside Case C-Corp Conversion | Change | Upside Case C-Corp Conversion | Change
Fee Related Earnings
2018e Pre-Tax Core FRE / Sh | $1.66 | $1.66 | 0% | $1.66 | 0%
Tax Rate | 24% | 24% | 0% | 24% | 0%
2018e After-Tax Core FRE / Sh | $1.26 | $1.26 | 0% | $1.26 | 0%
FRE Multiple | 15.0x | 15.0x | 0.0x | 22.5x | 7.5x
Core FRE Value | $18.94 | $18.94 | 0% | $28.40 | 50%
2018e Pre-Tax Core FRE / Sh | $1.66 | $1.66 | 0% | $1.66 | 0%
Tax Rate | 24% | 24% | 0% | 24% | 0%
2018e After-Tax Core FRE / Sh | $1.26 | $1.26 | 0% | $1.26 | 0%
FRE Multiple | 15.0x | 15.0x | 0.0x | 22.5x | 7.5x
Core FRE Value | $18.94 | $18.94 | 0% | $28.40 | 50%
Balance Sheet
Balance Sheet Net Cash and Investments / Sh (as of 3Q17) | $2.72 | $2.72 | 0% | $2.72 | 0%
Balance Sheet Net Cash and Investments / Sh (as of 3Q17) | $2.72 | $2.72 | 0% | $2.72 | 0%
Accrued Carry
Net Accrued Carry / Sh (as of 3Q17) | $2.16 | $1.64 | -24% | $1.64 | -24%
Net Accrued Carry / Sh (as of 3Q17) | $2.16 | $1.64 | -24% | $1.64 | -24%
Market Implied Carry Value
Avg Net Carried interest / Sh (2018e-2020e) | $2.45 | $1.86 | -24% | $1.86 | -24%
Multiple | 5.1x | 4.2x | -0.9x | 7.1x | 2.0x
Market Implied Carry Value | $12.61 | $7.91 | -37% | $13.30 | 6%
Avg Net Carried interest / Sh (2018e-2020e) | $2.45 | $1.86 | -24% | $1.86 | -24%
Multiple | 5.1x | 4.2x | -0.9x | 7.1x | 2.0x
Market Implied Carry Value | $12.61 | $7.91 | -37% | $13.30 | 6%
Valuation
Total Value | $36.42 | $31.20 | -14% | $46.07 | 26%
2018e EPS | $3.68 | $3.15 | -14% | $3.15 | -14%
P/E | 9.9x | 9.9x | 0.0x | 14.6x | 4.7x
Total Value | $36.42 | $31.20 | -14% | $46.07 | 26%
2018e EPS | $3.68 | $3.15 | -14% | $3.15 | -14%
P/E | 9.9x | 9.9x | 0.0x | 14.6x | 4.7x
Source: Company Data, Morgan Stanley Research estimates
Exhibit 31:
APO Estimated Potential Share Price in C-corp Conversion
Multiple on Future Performance Fees
Fee Related Earnings Multiple
2.2x 3.2x 4.2x 5.2x 6.2x 7.1x 8.2x
12.5x 24 26 28 30 32 33 35
15.0x 27 29 31 33 35 37 39
17.5x 31 32 34 36 38 40 42
20.0x 34 36 37 39 41 43 45
22.5x 37 39 41 42 44 46 48
25.0x 40 42 44 46 47 49 51
27.5x 43 45 47 49 51 52 54
30.0x 46 48 50 52 54 55 57
APO Estimated Potential Share Price in C-corp Conversion
Multiple on Future Performance Fees
Fee Related Earnings Multiple
2.2x 3.2x 4.2x 5.2x 6.2x 7.1x 8.2x
12.5x 24 26 28 30 32 33 35
15.0x 27 29 31 33 35 37 39
17.5x 31 32 34 36 38 40 42
20.0x 34 36 37 39 41 43 45
22.5x 37 39 41 42 44 46 48
25.0x 40 42 44 46 47 49 51
27.5x 43 45 47 49 51 52 54
30.0x 46 48 50 52 54 55 57
Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates
Exhibit 32:
APO Estimated % Change From Current Share Price
Multiple on Future Performance Fees
Fee Related Earnings Multiple
2.2x 3.2x 4.2x 5.2x 6.2x 7.1x 8.2x
12.5x -33% -28% -23% -18% -13% -8% -3%
15.0x -25% -20% -14% -9% -4% 0% 6%
17.5x -16% -11% -6% -1% 4% 9% 15%
20.0x -7% -2% 3% 8% 13% 18% 23%
22.5x 1% 6% 12% 17% 22% 26% 32%
25.0x 10% 15% 20% 25% 30% 35% 41%
27.5x 19% 24% 29% 34% 39% 44% 49%
30.0x 27% 32% 38% 43% 48% 52% 58%
APO Estimated % Change From Current Share Price
Multiple on Future Performance Fees
Fee Related Earnings Multiple
2.2x 3.2x 4.2x 5.2x 6.2x 7.1x 8.2x
12.5x -33% -28% -23% -18% -13% -8% -3%
15.0x -25% -20% -14% -9% -4% 0% 6%
17.5x -16% -11% -6% -1% 4% 9% 15%
20.0x -7% -2% 3% 8% 13% 18% 23%
22.5x 1% 6% 12% 17% 22% 26% 32%
25.0x 10% 15% 20% 25% 30% 35% 41%
27.5x 19% 24% 29% 34% 39% 44% 49%
30.0x 27% 32% 38% 43% 48% 52% 58%
Source: Thomson Reuters, Company Data, Morgan Stanley Research estimates
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HOUSE_OVERSIGHT_025572
HOUSE_OVERSIGHT_025572
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