Cautious Hold Rating on CVC Capital Partners plc Amidst Strong Performance and Future Challenges

J.P. Morgan analyst Angeliki Bairaktari maintained a Hold rating on CVC Capital Partners plc (CVC – Research Report) today and set a price target of €22.10.

Angeliki Bairaktari’s rating is based on a combination of factors that suggest a cautious approach towards CVC Capital Partners plc. Despite the company reporting a better-than-expected performance in H2 2024, with adjusted net income and EBITDA surpassing consensus estimates, the outlook for 2025 indicates potential challenges. The management has guided for a decline in the Management Fee Earnings (MFE) margin and a Performance-Related Earnings (PRE) that is expected to remain below the medium-term range, which could lead to consensus EPS downgrades.
Furthermore, while the company has shown strong management fee earnings and cost control, the anticipated lower PRE and higher costs in 2025 compared to current consensus estimates suggest limited upside potential. The stock’s valuation, trading at a premium compared to its global peers, also contributes to the Hold rating, as it reflects the market’s cautious sentiment amidst recent volatility. These factors collectively underpin the decision to maintain a Hold rating, balancing the positive recent performance with the tempered future outlook.