- Novembre 2, 2022
- Posted by: Oliver
- Categoria: Economics, Finance & accounting
For the second stock we’ll shift our focus from energy to finance. Blackstone is one of the best-known names in that sector, and holds the top spot as the world’s largest alternative asset manager. Blackstone’s portfolio, which has a global reach and totals some $950 billion in total assets under management, is highly diversified and includes $79 billion in hedge funds, $269 billion in credit and insurance, $283 billion worth of private equity, and $319 billion in the real estate sector.
While Blackstone is a market giant, with pockets deep enough to weather most storms, the company’s total revenues dropped from $6.2 billion in 3Q21 to just $1.06 billion in the current report. Earnings were also down; the distributable earnings of $1.06 per share was down from $1.28 in the year-ago quarter. At the same time, it’s important to note that this metric did beat the forecast by more than 8%.
On some bright spots, Blackstone reported $1.2 billion fee-related earnings (FRE) during the third quarter, for a 51% year-over-year gain, and net accrued performance revenues hit $7.1 billion. The total assets under management, at more than $950 billion, was up 30% y/y, and the company saw $44.8 billion in capital inflows during the quarter.
In all, Blackstone remained confident enough to keep up its capital return program, which sends profits and capital back to shareholders through a combination of share repurchases and dividend payments. The company’s total Q3 capital return hit $1.4 billion, and included the repurchase of 2 million common shares – and the payment of a common share dividend at 90 cents. At its current rate, the payment annualizes to $3.60 per common share and yields 4%.
Deutsche Bank analyst Brian Bedell, in his recent note on BX stock, wrote: “We view 3Q results as being relatively resilient amid a tough macro backdrop and investor fears of a major slowdown in fundamentals. While management acknowledged a likely temporary slowdown in retail fundraising given rising risk-off behavior, the fundraising profile overall remains very strong into next year and beyond.”
“Combined with comparatively good investment performance, including within real estate (that is likely to sustain fee-related performance fees), we see only a modest near-term slowdown in FRE growth, and we expect BX to achieve annual FRE growth of nearly 25% over the next three years,” the analyst added.
To this end, Bedell sees this as justification for reiterating his Buy rating on BX shares, and his $127 price target suggests an upside potential of 38% in the next 12 months. Overall, out of 14 recent analyst reviews on this stock, 10 are to Buy and 4 are Neutral, giving BX its Moderate Buy consensus rating. The shares are currently trading for $91.65 and their $108.27 average price target implies a gain of 18% in the coming year.
