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Blackstone Group (BX) Up 20.3% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Blackstone Group (BX - Free Report) . Shares have added about 20.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blackstone Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Blackstone’s third-quarter 2020 distributable earnings of 63 cents per share surpassed the Zacks Consensus Estimate of 57 cents. Moreover, the figure represents a rise of 8.6% from the prior-year quarter.
Results primarily benefited from an improvement in revenues. Moreover, a rise in AUM balance, mainly driven by inflows, was a positive for the company. However, higher operating expenses were the undermining factor.
Net income attributable to Blackstone was $794.7 million, up 2% year over year.
Segment Revenues Improve, Expenses Rise
Total segment revenues were $1.46 billion, up 6.3% year over year. The reported figure was in line with the Zacks Consensus Estimate. On a GAAP basis, revenues of $3.03 billion were up 74.8% from the prior-year quarter.
Total expenses (GAAP basis) increased 64.9% year over year to $1.33 billion. The rise in total compensation and benefits costs were partly offset by lower general, administrative and other costs, interest expenses, and fund expenses.
As of Sep 30, 2020, Blackstone had $5.6 billion in total cash, cash equivalents and corporate treasury investments as well as $11.1 billion in cash and net investments. Further, the company has a $1.6-billion undrawn credit revolver.
AUM Improves
Fee-earning AUM grew 12.8% year over year to $444.51 billion as of Sep 30, 2020. Total AUM amounted to $584.38 billion as of Sep 30, 2020, up 5.5% year over year. The rise in total AUM was largely driven by $15.1 billion of inflows.
As of Sep 30, 2020, undrawn capital available for investment was $152.4 billion.
Share Repurchase Update
The company repurchased 2 million shares in the quarter.
Outlook
The company expects its pending contracted realizations to contribute 54 cents per share to distributable earnings over the next couple of quarters prior to the impact of any additional sales.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 42.52% due to these changes.
VGM Scores
Currently, Blackstone Group has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Blackstone Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Blackstone Group (BX) Up 20.3% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Blackstone Group (BX - Free Report) . Shares have added about 20.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Blackstone Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Blackstone Q3 Earnings Beat Estimates, Costs Rise Y/Y
Blackstone’s third-quarter 2020 distributable earnings of 63 cents per share surpassed the Zacks Consensus Estimate of 57 cents. Moreover, the figure represents a rise of 8.6% from the prior-year quarter.
Results primarily benefited from an improvement in revenues. Moreover, a rise in AUM balance, mainly driven by inflows, was a positive for the company. However, higher operating expenses were the undermining factor.
Net income attributable to Blackstone was $794.7 million, up 2% year over year.
Segment Revenues Improve, Expenses Rise
Total segment revenues were $1.46 billion, up 6.3% year over year. The reported figure was in line with the Zacks Consensus Estimate. On a GAAP basis, revenues of $3.03 billion were up 74.8% from the prior-year quarter.
Total expenses (GAAP basis) increased 64.9% year over year to $1.33 billion. The rise in total compensation and benefits costs were partly offset by lower general, administrative and other costs, interest expenses, and fund expenses.
As of Sep 30, 2020, Blackstone had $5.6 billion in total cash, cash equivalents and corporate treasury investments as well as $11.1 billion in cash and net investments. Further, the company has a $1.6-billion undrawn credit revolver.
AUM Improves
Fee-earning AUM grew 12.8% year over year to $444.51 billion as of Sep 30, 2020. Total AUM amounted to $584.38 billion as of Sep 30, 2020, up 5.5% year over year. The rise in total AUM was largely driven by $15.1 billion of inflows.
As of Sep 30, 2020, undrawn capital available for investment was $152.4 billion.
Share Repurchase Update
The company repurchased 2 million shares in the quarter.
Outlook
The company expects its pending contracted realizations to contribute 54 cents per share to distributable earnings over the next couple of quarters prior to the impact of any additional sales.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 42.52% due to these changes.
VGM Scores
Currently, Blackstone Group has an average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Blackstone Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.