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New York-based Blackstone Inc. (BX) operates as an alternate fund manager, specializing in private equity, real estate, public debt & equity, and more. Valued at $114.5 billion by market cap, Blackstone invests at various stages of a company or startup’s life cycle including early-stage, seed, middle market, mature, and late venture.
Companies worth $10 billion or more are generally described as “large-cap stock,” Blackstone fits this perfectly. Given Blackstone operates as the largest alternative asset manager in the world, its valuation above this mark is not surprising. The company manages assets worth more than $1 trillion and its AUM includes approximately 250 portfolio companies and 12,600 real estate assets.
Despite its notable strengths, BX stock has tanked 25% from its all-time high of $200.96 touched on Nov. 25, 2024. Furthermore, BX has plunged 18.7% over the past three months, lagging behind the Financial Select Sector SPDR Fund’s (XLF) 68 basis point dip during the same time frame.
Although Blackstone has observed notable gains over the longer term, it has still underperformed other financial stocks. BX has surged 9.3% over the past six months and 19.1% over the past 52 weeks, compared to XLF’s 9.8% gains over the past six months and 23.6% returns over the past year.
To confirm the overall uptrend and recent downturn, BX has traded mostly above its 200-day moving average over the past year with slight fluctuations and fell below its 50-day moving average in mid-December 2024.
Despite reporting phenomenal financials, Blackstone’s stock prices dropped 4.1% after the release of its Q4 results on Jan. 31. Driven by solid capital inflows and capital appreciation, the company’s management and incentive fees observed a notable surge. Blackstone’s total revenues for the quarter soared 139.9% year-over-year to $3.1 billion, exceeding the Street’s expectations. Meanwhile, its distributable earnings for the quarter increased 56.3% year-over-year to $2.2 billion and its distributable earnings of $1.69 per share surpassed the Street’s expectations by 14.2%.
Although Blackstone has delivered solid financials over the past years, its stock prices have also soared to new highs. The recent rapid changes in the macro environment have already created havoc among investors and can reduce capital inflows in the asset management industry. Furthermore, given the prevailing negative investor sentiments, Blackstone may observe a decline in incentive fees received from the appreciation of its portfolio's assets. Meanwhile, the stock is already trading at a high P/E multiple of 43.82 on a TTM basis, which has triggered profit bookings in recent months.
Blackstone has also lagged behind its competitor KKR & Co. Inc.’s (KKR) 22.5% surge over the past year.
Among the 22 analysts covering the BX stock, the consensus rating is a “Moderate Buy.” Its mean price target of $184.35 suggests a 22.3% premium to current price levels.
