TD Cowen maintained its Hold rating on The Blackstone Group (NYSE: NYSE:BX) but increased the stock's price target to $149.00, up from the previous $133.00. This adjustment comes in the wake of management's optimistic view of the company's prospects leading into 2025, as discussed on October 17.
The firm's analyst cited a modification in earnings estimates for the fourth quarter of 2024 and the full year of 2025. The new estimates for distributable earnings (D/E) are now set at $1.21 for the fourth quarter of 2024, down from the prior estimate of $1.33, and $5.63 for 2025, slightly decreased from the earlier forecast of $5.71. The revisions were attributed to lower forecasted fee-related earnings (FRE) and net realizations for the fourth quarter; however, for 2025, an increase in net realizations is expected to be partially offset by a reduction in FRE.
The analyst's commentary highlighted the adjustments and rationale behind the new price target, stating, "Retain Hold; $149 new PT. At 30x revised 25E, we believe much good news is factored in." This statement suggests that the current valuation already incorporates the positive developments anticipated for the company.
The Blackstone Group's stock evaluation by TD Cowen reflects a cautious optimism, balancing the firm's positive outlook with a conservative stance on the company's valuation. The revised price target of $149.00 represents the analyst's expectation of the stock's potential performance based on the updated earnings projections.
Blackstone Group has reported a solid financial performance in the third quarter, with a GAAP net income of $1.6 billion and distributable earnings of $1.3 billion. The firm's total assets under management (AUM) reached $1.1 trillion, marking a 10% increase year-over-year. The company also acquired AirTrunk for $16 billion, which positions Blackstone as the world's largest data center provider.
BMO Capital Markets raised its price target for Blackstone to $134, citing strong Q3 returns. Goldman Sachs maintained a Neutral rating, adjusting its earnings per share estimates for the coming years. Citi also updated its financial outlook on Blackstone, raising the price target to $170 from $157, and anticipating an increase in Fee-Related Earnings (FRE) in the upcoming fourth quarter.
InvestingPro Insights
Recent data from InvestingPro provides additional context to TD Cowen's analysis of The Blackstone Group (NYSE: BX). The company's market capitalization stands at an impressive $206.63 billion, underscoring its significant presence in the financial sector. Blackstone's revenue growth has been robust, with a 35.11% increase over the last twelve months as of Q3 2024, and an even more striking 54.13% growth in the most recent quarter. This aligns with management's optimistic outlook for 2025 mentioned in the article.
InvestingPro Tips highlight that Blackstone's net income is expected to grow this year, which supports the positive sentiment expressed by TD Cowen. Additionally, the company has maintained dividend payments for 18 consecutive years, demonstrating a commitment to shareholder returns. However, it's worth noting that Blackstone is trading at a high P/E ratio of 54.96, which may justify TD Cowen's cautious "Hold" rating despite the increased price target.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips that could provide valuable insights into Blackstone's financial health and market position.
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