Back to top

Analyst Blog

On Jun 24, 2013, we downgraded our recommendation on The Blackstone Group L.P. (BX - Analyst Report) to Neutral from Outperform. Though the company reported better-than-expected first-quarter 2013 earnings, anticipation of slow investment realization in the near future led to the downgrade.

Why Neutral?

Blackstone’s first-quarter 2013 economic net income (ENI) came in at 55 cents per share, beating the Zacks Consensus Estimate by a penny. Moreover, this compares favorably with ENI of 44 cents per share recorded in the year-ago quarter. Results were aided by substantial top-line growth, offset by higher operating expenses. Steady assets under management (AUM) and improved balance sheet were the other positives for the quarter.

Following the result release, the Zacks Consensus Estimate went up by 1.8% to $2.30 per share over the last 60 days. However, for 2014, the Zacks Consensus Estimate went down by 0.7% to $2.69 per share over the same time frame. The company currently has a Zacks Rank #3 (Hold).

Blackstone’s strong presence across the globe due to continuous acquisitions and its ability to contain expenses without resorting to any cost reduction initiatives have resulted in the top-line improvement. Moreover, Blackstone’s solid fee-earning AUM and total AUM demonstrate its strong growth, further aided by increasing net inflows.

However, Blackstone’s increased dependence on management and advisory fees could adversely affect the company’s revenue generating capacity in the near term, if it witnesses any regulatory changes or a slowdown in business activities. Moreover, stringent regulations and ongoing capital market volatility can adversely affect the company’s financials going forward.

Other Major Banks to Consider

Some better performing stocks include GAMCO Investors, Inc. (GBL - Snapshot Report), Noah Holdings Limited (NOAH - Snapshot Report) and Virtus Investment Partners, Inc. (VRTS - Snapshot Report). All these carry a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%