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Blackstone (BX) Down 6.4% Since Earnings Report: Can It Rebound?
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It has been more than a month since the last earnings report for The Blackstone Group L.P. (BX - Free Report) . Shares have lost about 6.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Blackstone Beats Q3 Earnings and Revenue Estimates
Blackstone’s third-quarter 2017 economic net income (ENI) of 69 cents per share topped the Zacks Consensus Estimate of 57 cents. Also, the figure was 21% above the prior-year quarter level.
Improvement in revenues largely boosted earnings. Also, growth in assets under management (AUM) continued to impress. However, a rise in expenses was an undermining factor.
Blackstone reported ENI of $834.3 million, reflecting an increase 21% year over year.
Revenues & Costs Rise
Total revenues (GAAP basis) increased 22% year over year to $1.75 billion, primarily driven by a rise in performance fees as well as interest and dividend revenues. Also, the top line handily surpassed the Zacks Consensus Estimate of $1.42 billion.
Total expenses (GAAP basis) rose17% year over year to $903.8 million. The increase was primarily due to a drastic surge in fund expenses.
Fee-earning AUM grew 7% year over year to $285.7 billion. Total AUM amounted to $387.4 billion as of Sep 30, 2017, up 7% year over year. The rise in total AUM was largely driven by $62.4 billion of inflows.
As of Sep 30, 2017, Blackstone had $5 billion in total cash, cash equivalents and corporate treasury investments.
Outlook
Management now expects fee related earnings (FRE) to grow at high-teens in 2017, up from the prior guidance of mid-teens percentage growth.
Moreover, management expects to see improvement in performance fees in 2018.
Over the long term, the company’s weighted average management fee is likely to remain stable.
Further, from a DE perspective, management remains confident about its FRE trajectory and realization pipeline, and performance fee momentum in 2017. The company projects DE of 60 cents per share in the fourth quarter driven by expected FRE growth.
Management expects low double-digit AUM growth and high-single-digits to low-double-digits growth in fee-earning AUM to continue.
Management expects the pace of total AUM growth to further accelerate in fourth-quarter 2017 and into 2018 driven by a variety of products and significant initiatives.
Driven by safety and high returns, management expects its alternative class to continue growing in the near term.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimate. There has been one revision lower for the current quarter.
VGM Scores
At this time, the stock has a poor Growth Score of F, however its Momentum is doing a lot better with a B. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Blackstone (BX) Down 6.4% Since Earnings Report: Can It Rebound?
It has been more than a month since the last earnings report for The Blackstone Group L.P. (BX - Free Report) . Shares have lost about 6.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Blackstone Beats Q3 Earnings and Revenue Estimates
Blackstone’s third-quarter 2017 economic net income (ENI) of 69 cents per share topped the Zacks Consensus Estimate of 57 cents. Also, the figure was 21% above the prior-year quarter level.
Improvement in revenues largely boosted earnings. Also, growth in assets under management (AUM) continued to impress. However, a rise in expenses was an undermining factor.
Blackstone reported ENI of $834.3 million, reflecting an increase 21% year over year.
Revenues & Costs Rise
Total revenues (GAAP basis) increased 22% year over year to $1.75 billion, primarily driven by a rise in performance fees as well as interest and dividend revenues. Also, the top line handily surpassed the Zacks Consensus Estimate of $1.42 billion.
Total expenses (GAAP basis) rose17% year over year to $903.8 million. The increase was primarily due to a drastic surge in fund expenses.
Fee-earning AUM grew 7% year over year to $285.7 billion. Total AUM amounted to $387.4 billion as of Sep 30, 2017, up 7% year over year. The rise in total AUM was largely driven by $62.4 billion of inflows.
As of Sep 30, 2017, Blackstone had $5 billion in total cash, cash equivalents and corporate treasury investments.
Outlook
Management now expects fee related earnings (FRE) to grow at high-teens in 2017, up from the prior guidance of mid-teens percentage growth.
Moreover, management expects to see improvement in performance fees in 2018.
Over the long term, the company’s weighted average management fee is likely to remain stable.
Further, from a DE perspective, management remains confident about its FRE trajectory and realization pipeline, and performance fee momentum in 2017. The company projects DE of 60 cents per share in the fourth quarter driven by expected FRE growth.
Management expects low double-digit AUM growth and high-single-digits to low-double-digits growth in fee-earning AUM to continue.
Management expects the pace of total AUM growth to further accelerate in fourth-quarter 2017 and into 2018 driven by a variety of products and significant initiatives.
Driven by safety and high returns, management expects its alternative class to continue growing in the near term.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimate. There has been one revision lower for the current quarter.
VGM Scores
At this time, the stock has a poor Growth Score of F, however its Momentum is doing a lot better with a B. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.