KKR (NYSE:KKR) increased its stake in the Japanese supermarket chain Seiyu. The global investment firm will buy Rakuten’s stake in Seiyu via one of its funds. The deal increases KKR’s stake in Seiyu to 85% from 65%. Retail giant Walmart (NYSE:WMT) is also a shareholder in Seiyu.
The announcement emphasized that Rakuten will continue to work with Seiyu and strengthen its offering.
Seiyu focuses on convenience and value offerings, which drove its financials in 2022. It delivered 50% year-over-year growth in its operating profit in Fiscal 2022. It has more than 300 retail units in Japan and is focusing on growing its share in both the offline and online spaces.
KKR, which aims to generate attractive investment returns through its investments, is upbeat about Seiyu’s prospects and expects the supermarket chain to continue to deliver strong growth. The firm recently announced better-than-expected first-quarter earnings, which benefitted from higher management fees.
Following Q1 earnings, Goldman Sachs analyst Alexander Blostein reiterated the Buy rating on the stock. While Blostein sees challenges to KKR’s fundraising and capital market fees in the near term, he believes that the macro headwinds are already reflected in the stock price. The analyst expects KKR to benefit from its growing position in Credit and Real Assets.
Is KKR Stock a Buy or Sell?
KKR stock sports a Strong Buy consensus rating on TipRanks, reflecting 12 Buy and two Hold recommendations. Meanwhile, analysts’ average price target of $65.75 implies 35.26% upside potential.
