TD Cowen has maintained a Hold rating on shares of The Blackstone Group (NYSE: NYSE:BX) with a steady price target of $120.00.
The firm's stance comes after Blackstone released its intra-quarter realization update for the period from July 1 to September 24, which revealed figures below the firm's model and consensus estimates.
The update indicated that third-quarter distributable earnings (DE) could range between $0.90 to $0.95 per share, falling short of the $1.10 consensus.
Despite the lower-than-anticipated results in the update, TD Cowen anticipates that realization activity for Blackstone will likely increase as the year progresses, particularly into 2025. However, they noted that this growth is expected to start from a lower base, given the current update figures.
Blackstone's realization activities are a critical factor in the firm's performance, as they represent the conversion of investments into cash or saleable securities. These activities can significantly impact distributable earnings, which are a key measure of profitability for investment firms like Blackstone.
In other recent news, Smartsheet (NYSE:SMAR), a collaboration software company, has been acquired by private equity firms Vista Equity Partners and Blackstone for $8.4 billion. The acquisition is a significant consolidation in the software industry, underscoring the value seen in productivity-enhancing tools.
In further developments, Blackstone, in partnership with the Canadian Pension Plan Investment Board (CPP Investments), has acquired AirTrunk, a prominent data center operator in the Asia Pacific region. The deal, worth A$24 billion, was partially financed by a substantial loan of approximately A$5.5 billion ($3.7 billion).
In a significant shift in policy, the National Football League (NFL) has approved private equity firms, including Blackstone, to acquire up to 10% stakes in its teams. This decision marks a considerable change in the league's traditional ownership structure.
Additionally, Redburn-Atlantic has initiated coverage on Blackstone with a Neutral rating, noting the company's substantial exposure to real estate and private equity.
InvestingPro Insights
As The Blackstone Group (NYSE: BX) navigates a period of tempered realization activity, investors may find value in the latest metrics and insights from InvestingPro. According to real-time data, Blackstone boasts a significant market capitalization of $192.49 billion, reflecting its substantial presence in the investment sector. With a P/E ratio standing at 57.09 and an adjusted P/E ratio for the last twelve months as of Q2 2024 at 59.63, the company is trading at a high earnings multiple. This could suggest a market expectation of continued earnings growth or a premium being placed on the company's assets and operations.
InvestingPro Tips highlight that Blackstone is expected to see net income growth this year, which aligns with the company's strategic maneuvers and market positioning. Furthermore, the company's strong return over the last three months, with a 27.36% price total return, showcases its recent performance resilience despite market volatility. With a robust gross profit margin of 94.65% for the same period, Blackstone demonstrates its ability to maintain profitability. Additionally, the company has consistently paid dividends for 18 consecutive years, offering a dividend yield of 2.08%, which could appeal to income-focused investors.
For those seeking a deeper analysis, InvestingPro provides further tips on Blackstone, including insights into analysts' earnings revisions and valuation metrics such as the Price/Book multiple. Currently, there are 13 additional InvestingPro Tips available that could serve as a valuable resource for investors considering Blackstone's stock as part of their portfolio.
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