On Friday, BMO Capital Markets adjusted its outlook on The Blackstone Group (NYSE:BX), increasing the price target to $134 from the previous $112 while maintaining a Market Perform rating on the stock. The adjustment follows Blackstone's report of its highest investment returns in the last three years during the third quarter.
The financial firm's analyst highlighted the significant growth in Blackstone's investment returns, which were complemented by an increase in both capital deployment and asset monetizations. These factors contribute to a clearer outlook for fundraising and carry realization for the company.
Looking ahead, the analyst recognized an improving environment for transaction activity as we approach 2025. This positive change is expected to benefit Blackstone's operations, especially considering the company's recent performance and strategic moves.
Despite the optimistic view on the company's operational prospects, BMO Capital Markets' analyst was cautious to note that the current market valuations might already be pricing in this optimism. This sentiment underscores a careful approach to the stock's future despite the recent strong performance.
Blackstone's third-quarter achievements have set a positive tone for its short-term outlook, with BMO Capital Markets acknowledging the company's potential in the face of a dynamic market landscape. The new price target of $134 reflects confidence in Blackstone's continued success in capitalizing on favorable market conditions.
In other recent news, The Blackstone Group reported strong third-quarter financial performance, with a GAAP net income of $1.6 billion and distributable earnings of $1.3 billion. This comes along with the notable acquisition of AirTrunk for $16 billion, which has positioned Blackstone as the world's largest data center provider.
Goldman Sachs (NYSE:GS) maintained a Neutral rating on Blackstone, citing that despite the company's accelerating earnings growth, the stock price might be ahead of the earnings trajectory. The firm's earnings per share estimates for the coming years are slightly adjusted to $4.21 for 2024, $5.36 for 2025, and $6.62 for 2026.
Citi also updated its financial outlook on Blackstone, raising the price target to $170.00 from $157.00 while keeping a Neutral stance. The firm's Fee-Related Earnings (FRE) outperformed Citi's estimates, leading to an improved fundraising outlook. Analysts anticipate that FRE will increase in the upcoming fourth quarter, bolstered by factors such as Blackstone Infrastructure Partners (BIP) crystallization.
In other company news, Blackstone's total assets under management (AUM) reached $1.1 trillion, marking a 10% increase year-over-year. The company's private credit business grew to $432 billion, and the private wealth channel raised $21 billion year-to-date.
InvestingPro Insights
Blackstone's recent performance aligns with several key metrics and insights from InvestingPro. The company's market capitalization stands at an impressive $206.63 billion, reflecting its significant presence in the financial sector. Blackstone's revenue growth of 35.11% over the last twelve months and a robust 54.13% growth in the most recent quarter underscore the strong performance noted in the article.
InvestingPro Tips highlight that Blackstone has maintained dividend payments for 18 consecutive years, demonstrating a commitment to shareholder returns. This consistency aligns with the company's strong financial position discussed in the article. Additionally, the stock is trading near its 52-week high, which corroborates the positive outlook presented by BMO Capital Markets.
It's worth noting that Blackstone's P/E ratio of 54.96 suggests a high valuation, which may support the analyst's caution regarding current market prices. For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips that could provide further insights into Blackstone's financial health and market position.
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