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Blackstone Expects Profits From Exiting Deals to be Muted in Q3
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For the first time, Blackstone Inc. (BX - Free Report) has provided an intra-quarter realization update related to the third quarter. The alternative asset manager expects profits from deal exits to be muted in the quarter.
Per the firm’s preliminary estimate, revenues from realization activities were in excess of $300 million between July 1 and Sept. 24, 2024.
The above-mentioned figure consists of 85% of realized performance revenues and 15% of realized principal investment income.
The estimated figure is based on closed investment realizations. It does not represent the total quarter’s results, which may differ significantly when accounting for other income sources and possible gains or losses by quarter-end.
In third-quarter 2023, Blackstone generated $337.9 million of realized performance revenues and $55.5 million of principal investment income.
Thus, the recent estimate provided by BX in an indication that alternative asset managers and real estate firms will find it difficult to generate high returns from deal exits in the coming period.
During the low interest-rate period, private equity firms engaged in various buyouts with the hope of generating robust returns later.
Although the Federal Reserve has started with its rate cut program, interest rates remain relatively high. Amid this, the buyout firms (which still have a heap of assets) are finding it difficult to sell the assets at the prices that they expected earlier, which is shrinking their profits.
Blackstone’s Price Performance & Zacks Rank
Over the past six months, BX shares have gained 16.7% against the industry’s decline of 3.8%.
Image Source: Zacks Investment Research
Currently, Blackstone carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for JEF’s earnings for the current fiscal year has been revised 2.4% upward over the past 60 days. JEF’s share price has increased 34.3% over the past six months.
Earnings estimates for LC for the current year have been revised 40.7% upward over the past 60 days. Over the past six months, LC shares have gained 21.9%.
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Blackstone Expects Profits From Exiting Deals to be Muted in Q3
For the first time, Blackstone Inc. (BX - Free Report) has provided an intra-quarter realization update related to the third quarter. The alternative asset manager expects profits from deal exits to be muted in the quarter.
Per the firm’s preliminary estimate, revenues from realization activities were in excess of $300 million between July 1 and Sept. 24, 2024.
The above-mentioned figure consists of 85% of realized performance revenues and 15% of realized principal investment income.
The estimated figure is based on closed investment realizations. It does not represent the total quarter’s results, which may differ significantly when accounting for other income sources and possible gains or losses by quarter-end.
In third-quarter 2023, Blackstone generated $337.9 million of realized performance revenues and $55.5 million of principal investment income.
Thus, the recent estimate provided by BX in an indication that alternative asset managers and real estate firms will find it difficult to generate high returns from deal exits in the coming period.
During the low interest-rate period, private equity firms engaged in various buyouts with the hope of generating robust returns later.
Although the Federal Reserve has started with its rate cut program, interest rates remain relatively high. Amid this, the buyout firms (which still have a heap of assets) are finding it difficult to sell the assets at the prices that they expected earlier, which is shrinking their profits.
Blackstone’s Price Performance & Zacks Rank
Over the past six months, BX shares have gained 16.7% against the industry’s decline of 3.8%.
Image Source: Zacks Investment Research
Currently, Blackstone carries a Zacks Rank #3 (Hold).
Better-Ranked Finance Stocks
A couple of better-ranked stocks from the finance space are Jefferies Financial Group Inc. (JEF - Free Report) and LendingClub Corporation (LC - Free Report) . Both JEF and LC currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for JEF’s earnings for the current fiscal year has been revised 2.4% upward over the past 60 days. JEF’s share price has increased 34.3% over the past six months.
Earnings estimates for LC for the current year have been revised 40.7% upward over the past 60 days. Over the past six months, LC shares have gained 21.9%.