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Asset Growth Likely to Aid Blackstone (BX) in Q3 Earnings

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Blackstone (BX - Free Report) is scheduled to report third-quarter 2021 results on Oct 21, before the opening bell. Its revenues and earnings are likely to have increased in the to-be-reported quarter on a year-over-year basis.

In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Results primarily benefited from an improvement in revenues. A rise in assets under management (AUM) balance, mainly driven by inflows, was a positive.

Blackstone has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 17%.

Blackstone Inc. Price and EPS Surprise

 

Blackstone Inc. Price and EPS Surprise

Blackstone Inc. price-eps-surprise | Blackstone Inc. Quote

Business prospects and activities of the company in the third quarter won analysts’ confidence. As a result, the Zacks Consensus Estimate for its earnings of 90 cents for the to-be-reported quarter has been revised 4.7% upward over the past 30 days. The figure indicates a rise of 42.9% from the prior-year quarter’s reported number.

The consensus estimate for sales is pegged at $2.22 billion, which suggests an increase of 52% from the year-ago quarter’s reported figure.

Now, let’s check the factors that are expected to have influenced the company’s third-quarter performance.

Key Factors and Estimates

Blackstone has been witnessing a rise in fee-earning AUM and total AUM for the past few years on the back of its diversified product and revenue mix, a superior position in the alternative investments space, and net inflows. Despite an overall challenging operating backdrop amid the coronavirus pandemic, the trend is likely to have continued in the to-be-reported quarter.

Unlike the prior quarters, the third quarter of 2021 did not record a significant rise in market volatility. Despite lower volatility and market normalization, client activity was decent. Also, the quarter witnessed overall asset inflows, which is expected to have aided Blackstone’s AUM growth.

The Zacks Consensus Estimate for Blackstone’s third-quarter AUM is pegged at $747 billion, which indicates a rise of 9.2% from the previous quarter’s reported figure. Also, the consensus estimate for total fee-earning AUM of $518 billion suggests a sequential rise of 3.8%.

The Zacks Consensus Estimate for net management and advisory fees (segment revenues) for the to-be-reported quarter is pegged at $1.24 billion, which indicates growth of 2.2% from the prior quarter.

Likewise, the consensus estimate for fee-related performance revenues (segment revenues) of $76 million suggests a rise of 55.5% sequentially.

Blackstone’s expenses have been elevated over the past few years mainly because of higher general, administrative and other expenses. As the company continues to make investments in franchise, expenses are expected to have risen to some extent in the third quarter as well.

Here is what our quantitative model predicts:

According to our quantitative model, the chances of Blackstone beating the Zacks Consensus Estimate this time are high. That is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or better.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Blackstone is +2.68%.

Zacks Rank: The company currently carries a Zacks Rank #3.

Other Stocks That Warrant a Look

Here are some other finance stocks that you may want to consider as these too have the right combination of elements to post an earnings beat in their upcoming releases, per our model.

KeyCorp (KEY - Free Report) is scheduled to report quarterly numbers on Oct 21. The company has an Earnings ESP of +0.56% and a Zacks Rank of 3 at present.

BankUnited, Inc. (BKU - Free Report) is slated to report quarterly results on Oct 21. The company currently has an Earnings ESP of +2.09% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

East West Bancorp, Inc. (EWBC - Free Report) is also slated to report quarterly earnings tomorrow. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +1.14%.


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