Private-Equity Giant BX Gaining On Q4 Fundraising & Performance
By Murray Coleman
Private-equity giant Blackstone Group’s (BX) shares are rebounding this afternoon after investors had a chance to digest the company’s report that its fourth quarter economic profit fell by 12% to $449.9 million, or 40 cents a unit, from a year earlier. The stock took a dive early, but results matched the consensus estimate compiled by Thomson Reuters. Also, performance of BX’s PE funds remained strong in the quarter and fundraising efforts were a bright spot.
Sandler O’Neill analysts credited lower expenses for offsetting “light” investment income. They reiterated a buy rating on the stock. “BX maintains durable competitive advantages around diversification, scale and global reach,” they told investors today. Also, BX’s fee-paying assets under management continue to trend higher, Sandler’s note pointed out, driven by ongoing fundraising and net inflows. Lead analyst Michael Kim also found capital deployment brisk reflecting “ample” capacity, long-dated pools of capital and fewer competitors. “Moreover, our sum-of-the-parts work continues to suggest meaningful upside for the stock,” he asserted.
Citi also maintained its buy rating on BX, noting that advisory revenues came in “much higher than expected.” Lead analyst William Katz wrote that he expected shares to initially show weakness, however, after a ”solid but not blow-out fourth quarter.”
After falling more than 1% early in today’s session, BX’s stock was most recently advancing by 0.5%, or nine cents, at $16.73 a share.