KKR Stock Down 20% YTD Ahead of Earnings – What To Expect

KKR & Co. Inc. (NYSE: KKR), a global investment firm, finds itself at a critical juncture as it prepares to release its next earnings report tomorrow. KKR stock, currently trading at $117, is down 1.94% on the session, and 20% year-to-date, a concerning trend for those accustomed to KKR's historically strong performance.

Analysts expect KKR to report an EPS of $1.30, slightly below the $1.38 posted a year ago, indicating a modest dip in per-share earnings. However, revenue is projected to rise to $2.26 billion, reflecting a strong 15.2% year-over-year increase, suggesting robust growth in the firm’s investment income and asset management activities despite some pressure on profitability.

KKR has been actively reshaping its portfolio through strategic acquisitions and partnerships. A key development was the agreement to acquire OSTTRA from S&P Global and CME Group for $3.1 billion in April 2025. OSTTRA provides crucial post-trade services across multiple asset classes, including interest rates, foreign exchange, equity, and credit. This acquisition is anticipated to bolster KKR's footprint in financial market infrastructure and generate synergistic opportunities.

In October 2025, KKR also made a strategic investment in SupplyHouse, an e-commerce platform focused on HVAC, plumbing, and electrical products. This move aligns with KKR's broader strategy of investing in promising middle-market businesses in North America and leveraging their expertise to drive growth.

Earlier in the year, KKR announced a $1.5 billion offering of Series D Mandatory Convertible Preferred Stock. The proceeds are earmarked for acquiring additional equity interests in core private equity portfolio companies. While this move provides KKR with additional capital, it also introduces potential dilution for existing shareholders when the preferred stock converts to common stock around March 1, 2028. The market's reaction to this offering has been mixed, with some questioning the timing and necessity of the capital raise.

The inclusion of KKR in the S&P 500 index in June 2024 was initially expected to provide a boost to the stock price. Index funds and ETFs that track the S&P 500 were required to purchase KKR shares, increasing demand. However, the broader market downturn and concerns about KKR's performance have offset any sustained positive impact from this inclusion.

The upcoming earnings release is crucial. Analysts currently have a consensus “Strong Buy” rating on KKR, with expectations of a 33.1% year-over-year increase in earnings per share to $5.19 for the fiscal year ending December 2025. Markets will be scrutinizing the actual EPS, revenue figures, and management's guidance for the next quarter. Any significant deviation from these expectations could trigger a sharp reaction in the stock price.

While the consensus points to a “Strong Buy” based on expected earnings growth and strategic initiatives, a more cautious perspective might be warranted. The aggressive acquisition strategy, while potentially beneficial in the long run, could strain KKR's resources and expose it to integration risks.

Furthermore, the heavy reliance on private equity investments makes KKR vulnerable to economic downturns and fluctuations in asset valuations. The convertible preferred stock offering, while providing capital, also signals that KKR may be facing challenges in generating sufficient organic cash flow to fund its expansion plans.

Perhaps, the market's current pessimism is not entirely unfounded, and a more conservative approach to KKR might be prudent. The current valuation may already bake in much of the anticipated earnings growth, leaving limited upside potential.

KKR stands at a crossroads. The upcoming earnings release will be a pivotal moment, providing crucial insights into the company's current performance and future prospects. While analysts remain largely bullish, one should carefully consider the various factors at play, including the bearish technical indicators, the potential dilution from the convertible preferred stock, and the inherent risks associated with KKR's investment strategy.