Last Update 08 Nov 25
Fair value Increased 0.55%BX: Portfolio Repositioning And New Deals Will Drive Long-Term Resilience
Analysts have slightly increased their price target for Blackstone, raising it by approximately $1 to $179.78. They cite steady forecast margins and a stable growth outlook amid mixed near-term industry views.
Analyst Commentary
Recent Street research reveals split sentiment among analysts regarding Blackstone's future prospects. Their commentary reflects a mix of optimism about long-term growth drivers and concerns about near-term performance and industry dynamics.
Bullish Takeaways- Some bullish analysts have revised their price targets upward, reflecting confidence in Blackstone's positioning and expectations for a rebound in capital markets activity.
- Despite industry headwinds, analysts point to steady fundraising and a resilient growth outlook as positive indicators of Blackstone's execution strength.
- Updated coverage among North American alternative asset managers suggests Blackstone's relative advantage, particularly as credit markets stabilize and market valuations improve.
- Ongoing strategic acquisitions support Blackstone's pursuit of diversification and long-term value creation.
- Bearish analysts have lowered their price targets due to caution over Blackstone's near-term management fee growth and softening FRE margins.
- Recent share price weakness has been attributed to market concerns about deceleration in management fees and muted realizations in the upcoming quarters.
- Mixed returns and expectations for low investing activity raise questions about the pace of recovery in Blackstone's core operations.
- Short-term uncertainties tied to external market valuations and performance volatility remain a headwind for sustained upside in the shares.
What's in the News
- Blackstone is planning to sell its $1.8 billion senior housing portfolio in the U.S. after incurring losses exceeding $600 million, which represents more than a 70% decline compared to original purchase prices (Wall Street Journal).
- Blackstone and TPG are nearing a deal to acquire medical device maker Hologic, with negotiations reportedly valuing the company at over $17 billion including debt (Bloomberg).
- Blackstone has invested $706 million to acquire a 9.99% stake in India's Federal Bank, making it the bank's largest shareholder (Bloomberg).
- SL Green Realty has agreed to buy a Midtown Manhattan office building from Blackstone for $730 million, indicating continued shifts in New York City's office market (Wall Street Journal).
- Blackstone is among the leading bidders for Optum's UK business, as private equity interest in healthcare assets remains elevated (Sky News).
Valuation Changes
- The Fair Value Estimate has risen slightly from $178.79 to $179.78, reflecting marginal positive adjustments to Blackstone's outlook.
- The Discount Rate has increased from 8.19% to 8.31%, indicating a modest uptick in the required rate of return for investors.
- The Revenue Growth Projection has decreased marginally from 19.70% to 19.67%.
- The Net Profit Margin has improved slightly from 48.30% to 48.35%.
- The Future P/E Ratio has edged up from 17.69x to 17.84x, suggesting a minor change in earnings expectations.
Key Takeaways
- Blackstone is positioned for strong future growth with high inflows and substantial capital for opportunistic investments in undervalued assets.
- Strategic alliances and innovations in private credit and wealth management aim to boost revenue through expanded market reach and larger spreads.
- Economic and geopolitical uncertainties, including tariffs and trade negotiations, pose risks to Blackstone's revenues, real estate values, earnings, and overall financial performance.
Catalysts
About Blackstone- An alternative asset management firm specializing in private equity, real estate, hedge fund solutions, credit, secondary funds of funds, public debt and equity and multi-asset class strategies.
- Blackstone has raised $62 billion of inflows in Q1 2025, marking the highest level in three years, which boosts assets under management (AUM) and gives the company a strong foundation for future revenue growth.
- The firm is well-positioned to benefit from market dislocation with $177 billion of dry powder available for opportunistic investments, potentially increasing future earnings as capital is deployed in undervalued assets.
- Blackstone's strategic alliance with Wellington and Vanguard aims to develop integrated public-private investment solutions, potentially expanding revenue channels by tapping into the private wealth market.
- The expansion in private credit, particularly in investment-grade private credit, shows a 35% year-over-year growth, indicating potential for significant revenue streams due to larger spreads and structural tailwinds in the credit markets.
- The innovation in private wealth management and strong fundraising results in this channel ($11 billion in the first quarter of 2025) suggest potential for margin expansion and revenue growth by further penetrating individual investor markets.
Blackstone Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Blackstone's revenue will grow by 16.7% annually over the next 3 years.
- Analysts assume that profit margins will increase from 21.2% today to 48.9% in 3 years time.
- Analysts expect earnings to reach $10.5 billion (and earnings per share of $8.25) by about September 2028, up from $2.9 billion today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 28.6x on those 2028 earnings, down from 47.3x today. This future PE is greater than the current PE for the US Capital Markets industry at 26.7x.
- Analysts expect the number of shares outstanding to grow by 1.91% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 8.2%, as per the Simply Wall St company report.
Blackstone Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Tariffs and ongoing multilateral trade negotiations introduce significant uncertainty that could impact economic growth and inflation, influencing investor sentiment and potentially affecting Blackstone's future revenues.
- Potential increases in construction costs due to tariffs may reduce new supply in real estate, affecting Blackstone's real estate portfolio values and consequently impacting revenue and net margins.
- Market volatility and geopolitical concerns could reduce the near-term realization activity, affecting Blackstone’s distribution of earnings and net margins from asset sales.
- The high level of market uncertainty may delay investment deployment, diminishing the opportunity for immediate capital gains, and potentially affecting earnings growth.
- The economic slowdown risk due to delayed tariff diplomacy could negatively affect a broader range of companies in Blackstone's portfolio, potentially impacting asset valuations and overall financial performance.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $181.684 for Blackstone based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $215.0, and the most bearish reporting a price target of just $150.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $21.5 billion, earnings will come to $10.5 billion, and it would be trading on a PE ratio of 28.6x, assuming you use a discount rate of 8.2%.
- Given the current share price of $173.17, the analyst price target of $181.68 is 4.7% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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