On Friday, BMO Capital maintained its Market Perform rating on The Blackstone Group (NYSE:BX) with a steady price target of $112.00. The firm noted Blackstone's significant uptick in deal-making activities, which is anticipated to positively influence fundraising efforts and the realization of carried interest in the lead-up to 2025.
The Blackstone Group has been experiencing an increase in both new investment opportunities and the liquidation of existing investments. This trend is expected to enhance the company's ability to generate funds and realize earnings from investments where it shares in the profits, known as carried interest.
BMO Capital's assessment highlights Blackstone's current market valuation, which is based on a multiple of 25 times its distributable earnings. This translates to an approximate 40 times forward-looking earnings, suggesting that the stock price is factoring in a robust growth in assets under management (AUM) and earnings.
The analyst's commentary underscores the positive outlook for Blackstone's performance in terms of fundraising and carry realizations. This optimism is reflected in the stock's valuation, which is seen as a sign of market confidence in the company's growth trajectory.
In conclusion, BMO Capital's reiteration of the Market Perform rating indicates a neutral stance on Blackstone's stock, maintaining the previously set price target of $112.00. The firm's outlook points to a steady path for Blackstone, with expectations of continued improvement in deal activities and fundraising prospects.
In other recent news, Blackstone Group LP reported a 3% increase in second-quarter distributable earnings, amounting to $1.3 billion, primarily driven by robust asset sales in its private equity and credit divisions.
TD Cowen, Piper Sandler, Evercore ISI, and Citi revised their price targets for Blackstone, citing aspects such as organic growth potential, strong investment performance, and improved outlook in various sectors. The firms also adjusted their earnings estimates for the company for the years 2024 and 2025.
Recent developments include organizational changes to Blackstone's business segments and the sale of Alinamin, a Japanese pharmaceutical company, to MBK Partners for approximately $2.17 billion, with Blackstone retaining a minority stake in the company. In a separate event, Anthony Viggiano, a former analyst with Goldman Sachs and Blackstone Group Inc., was sentenced to 28 months in prison for insider trading.
InvestingPro Insights
With a Market Perform rating from BMO Capital, The Blackstone Group (NYSE:BX) is a company whose recent activities have drawn considerable attention. InvestingPro data reveals a striking 129.76% revenue growth over the last twelve months as of Q1 2024, along with a robust gross profit margin of nearly 90%. The company's market capitalization stands at a substantial $170.34 billion, reflecting investor confidence and market sentiment.
An InvestingPro Tip notes that Blackstone is expected to see net income growth this year, aligning with BMO Capital's positive outlook on the company's deal-making and fundraising abilities. Additionally, another tip points out that Blackstone has been maintaining its dividend payments for 18 consecutive years, which may be of interest to income-focused investors. While the company's Price / Earnings (P/E) ratio is currently high at 48.96, the Price / Earnings to Growth (PEG) ratio suggests that the earnings growth rate might justify the higher P/E, given its value of just 0.2.
For those looking to delve deeper into Blackstone's financial health and prospects, InvestingPro offers a comprehensive array of tips and metrics. Currently, there are 11 additional InvestingPro Tips available for Blackstone, which can be accessed for further investment analysis. Interested investors may use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, enhancing their investment research with valuable insights from InvestingPro.
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