On Friday, Evercore ISI exhibited confidence in The Blackstone Group (NYSE: NYSE:BX), raising its price target to $148 from $135 while maintaining an Outperform rating. This adjustment reflects a positive outlook on several of the company's divisions despite broader economic challenges.
The Blackstone Group's second quarter distributed earnings (DE) per unit were reported at $0.96, narrowly missing the anticipated figures of $0.97 and $0.98 forecasted by Evercore ISI and consensus estimates, respectively. The minor shortfall has not dampened the firm's perspective on Blackstone's potential, particularly in areas such as private credit, insurance, secondaries, and digital and energy infrastructure.
Investors and analysts have shown keen interest in the prospects of Blackstone's real estate and private equity segments, especially considering the current focus on a potential market bottom and subsequent growth. There is a general anticipation of a more favorable rate environment which could further enhance investor sentiment towards the company.
The firm highlighted that Blackstone's performance has remained robust in certain sectors. Credit and insurance have seen a year-to-date distributed earnings increase of 21% year-over-year. Additionally, the private wealth sector has amassed $240 billion in assets under management, and the infrastructure division has reached $50 billion in assets under management.
Evercore ISI also noted industry feedback from banks and brokers, suggesting the early stages of a multi-year recovery in mergers and acquisitions (M&A) and investment banking, sectors that could potentially benefit Blackstone in the longer term. These insights into the company's diverse operations and market positioning underscore the rationale behind the raised price target.
In other recent news, Blackstone Group LP reported a 3% increase in second-quarter distributable earnings, totaling $1.3 billion, largely due to robust asset sales in its private equity and credit divisions. The firm also noted approximately $40 billion in inflows to its funds and a record $34 billion in capital deployment from them during the quarter.
Citi revised its earnings per share (EPS) estimates for Blackstone for the years 2024 and 2025, setting the new EPS projections at $4.89 and $6.23, respectively.
On the analyst front, Jefferies adjusted its price target for The Blackstone Group, lowering it to $138 from the previous $145, while maintaining a Buy rating on the stock. In a separate development, a former analyst with Goldman Sachs (NYSE:GS) and Blackstone Group Inc., Anthony Viggiano, has been sentenced to 28 months in prison for engaging in insider trading.
Blackstone also announced organizational changes to its business segments and provided revised supplemental financial data for the first quarter.
The firm's GP stakes business will now be included under the Private Equity segment, and the operations managed by Harvest Fund Advisors LLC have been moved to the Multi-Asset Investing segment. Blackstone has sold Alinamin, a Japanese pharmaceutical company, to MBK Partners for approximately $2.17 billion, but will maintain a minority stake in the company.
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