Eleven percent organic fee growth and $16 of third-quarter earnings do not force a rerating. I model $62 of 2027 earnings at 18.5 times, a $1,147 stock.
Key points
- 11% organic base-fee growth in Q3 2026, ninth quarter at or above 5%.
- $15.93 adjusted diluted EPS in Q3, versus $11.55 a year earlier.
- 18.6 times my $58 of 2026 earnings is what $1,074 requires.
The call
The shares need about $58 of 2026 adjusted earnings to sit at $1,074. That is 18.6 times, a full-cycle multiple for an asset manager that still lives on market levels and performance fees.
I model $62 of 2027 earnings after 7% organic fee growth, a modest market lift, and mix from private markets and Aladdin. At 18.5 times that is $1,147, a market-like return from here, not a rerating.
Adjusted EPS by quarter ($)Company releases through Q3 2026; Q4 2026E and 2027 quarters are mine.
Valuation
| Item | Figure |
|---|
| 2026E adjusted EPS | $58 |
| 2027E adjusted EPS | $62 |
| Multiple on 2027E | 18.5 times |
| 12-month target | $1,147 |
| Implied return from $1,074 | 7% plus 2% yield |
Eighteen and a half times is the recent run-rate, not a premium for the 2030 mix story. Being right on growth and wrong on the multiple still leaves a small gain; being wrong on markets cuts earnings faster than buybacks can offset.
Organic base-fee growth vs 6-8% goalManagement comments on consecutive earnings calls; Q3 2026 print 11%.
Risks
- Equity or credit markets fall 15% and cut average AUM and performance fees; watch quarterly average AUM versus quarter-end.
- Organic base-fee growth drops below 6% for two quarters; watch ETF and private-markets net flows.
- Integration of HPS or GIP raises compensation or earn-out shares; watch diluted share count and adjusted margin.
What would change my mind
Two more quarters of 10% organic fee growth with GAAP margin rising toward 35% would justify 20 times and a buy.