Blackstone Group stock target raised amid strong sectors Author: Investing.com

Evercore ISI showed confidence on Friday Blackstone Group (NYSE: NYSE:) raising its price target to $148 from $135 while maintaining an Outperform rating. The revision reflects a positive outlook for several of the company’s businesses despite broader economic challenges.

Blackstone Group’s second quarter distributed earnings (DE) per unit came in at $0.96, missing the $0.97 and $0.98 forecasted by Evercore ISI and consensus estimates, respectively. The small shortfall did not dampen the firm’s outlook on Blackstone’s potential, particularly in areas such as private credit, insurance, secondary services, and digital and energy infrastructure.

Investors and analysts have shown great interest in the prospects for Blackstone’s real estate and private equity segments, especially given the current focus on a potential market bottom and subsequent growth. There is a general expectation of a more favorable interest rate environment, which could further improve investor sentiment toward the company.

The firm highlighted that Blackstone’s performance remained solid across several sectors. Credit and Insurance saw its year-to-date distributed earnings increase by 21% year over year. Additionally, the private wealth sector added $240 billion in assets under management, while its infrastructure division reached $50 billion in assets under management.

Evercore ISI also noted industry sentiment from banks and brokers suggesting the early stages of a multi-year boom in mergers and acquisitions (M&A) and investment banking, sectors that could potentially benefit Blackstone over the long term. These observations about the company’s diverse operations and market positioning underscore the rationale for raising the target price.

In other recent news, Blackstone Group LP reported a 3% increase in distribution earnings in the second quarter, totaling $1.3 billion, driven primarily by solid asset sales in its private equity and credit businesses. The firm also saw about $40 billion in inflows into its funds and a record $34 billion in capital dispositions from them during the quarter.

Citi revised Blackstone’s earnings per share (EPS) estimates for 2024 and 2025, setting new EPS forecasts of $4.89 and $6.23, respectively.

On the analyst front, Jefferies adjusted its price target for The Blackstone Group, lowering it to $138 from $145 previously, while maintaining a Buy rating on the stock. In a separate development, former Goldman Sachs and Blackstone Group Inc. analyst Anthony Viggiano was sentenced to 28 months in prison for his role in insider trading.

Blackstone also announced organizational changes across its business segments and provided adjusted supplemental financial data for the first quarter.

The firm’s GP business will now be included in the Private Equity segment, while operations managed by Harvest Fund Advisors LLC have been moved to the Multi-Asset Investing segment. Blackstone has sold Alinamin, a Japanese pharmaceutical company, to MBK Partners for about $2.17 billion, but will retain a minority stake in the company.

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