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AUM Growth Likely to Support Blackstone's (BX) Q3 Earnings
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Blackstone (BX - Free Report) is scheduled to report third-quarter 2023 results on Oct 19, before the opening bell. Its revenues and earnings are likely to have declined 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 a rise in the assets under management (AUM) balance, driven by decent inflows. However, a tough operating environment hurt performance fees, which led to a fall in segment revenues.
Blackstone has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three and matched in one of the trailing four quarters, the average surprise being 5.7%.
The business prospects and activities of the company in the third quarter did not win analysts’ confidence. As a result, the Zacks Consensus Estimate for its third-quarter earnings of 97 cents per share has been revised 2% lower over the past seven days. The figure indicates a decline of 8.5% from the prior-year quarter’s reported number. Our estimate for earnings is pinned at 94 cents.
The consensus estimate for sales is pegged at $2.49 billion, which suggests a fall of 4% from the year-ago quarter’s reported figure. Our estimate for the metric is $2.48 billion.
Now, let’s check the factors that are expected to have influenced the company’s third-quarter performance.
Key Factors and Estimates for Q3
Blackstone has been witnessing increases 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 subdued market volatility and lower client activity in the third quarter because of seasonality, and concerns over the economic slowdown, the Federal Reserve’s hawkish monetary policy and other geopolitical issues, Blackstone is expected to have recorded growth in the AUM balance in the quarter, driven by overall asset inflows.
The Zacks Consensus Estimate for Blackstone’s third-quarter AUM is pegged at $1.03 trillion, which indicates a rise of 7.9% from the prior-year quarter’s reported figure. Our estimate for total AUM is pinned at $1 trillion. The consensus estimate for total fee-earning AUM of $745 billion suggests a year-over-year rise of 5.5%. Our estimate for the same is pinned at $736.5 billion.
The Zacks Consensus Estimate for net management and advisory fees (segment revenues) for the to-be-reported quarter is pegged at $1.66 billion, which indicates a rise of 2.7% from the prior-year quarter. Our estimate for the same is $1.49 billion.
The consensus estimate for fee-related performance revenues (segment revenues) of $299 million suggests a decline of 19.6% from the prior-year quarter’s reported figure. Our estimate for the metric is pinned at $160.2 million.
Blackstone’s expenses have been elevated over the past few years mainly because of higher general, administrative and other expenses. As the company has been continuing to make investments in franchise, expenses are expected to have risen to some extent in the third quarter. Our estimate for total expenses (GAAP basis) is pinned at $1.58 billion, implying a year-over-year rise of 64.8%.
Here is what our quantitative model predicts:
According to our quantitative model, the chances of Blackstone beating the Zacks Consensus Estimate this time are low. This is because it does not have 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 -0.10%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks That Warrant a Look
A couple of finance stocks that you may want to consider, as these have the right combination of elements to post an earnings beat in the upcoming releases per our model, are Wells Fargo (WFC - Free Report) and PNC Financial (PNC - Free Report) .
PNC Financial is also scheduled to release third-quarter 2023 earnings on Oct 13. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +1.26%.
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AUM Growth Likely to Support Blackstone's (BX) Q3 Earnings
Blackstone (BX - Free Report) is scheduled to report third-quarter 2023 results on Oct 19, before the opening bell. Its revenues and earnings are likely to have declined 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 a rise in the assets under management (AUM) balance, driven by decent inflows. However, a tough operating environment hurt performance fees, which led to a fall in segment revenues.
Blackstone has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in three and matched in one of the trailing four quarters, the average surprise being 5.7%.
Blackstone Inc. Price and EPS Surprise
Blackstone Inc. price-eps-surprise | Blackstone Inc. Quote
The business prospects and activities of the company in the third quarter did not win analysts’ confidence. As a result, the Zacks Consensus Estimate for its third-quarter earnings of 97 cents per share has been revised 2% lower over the past seven days. The figure indicates a decline of 8.5% from the prior-year quarter’s reported number. Our estimate for earnings is pinned at 94 cents.
The consensus estimate for sales is pegged at $2.49 billion, which suggests a fall of 4% from the year-ago quarter’s reported figure. Our estimate for the metric is $2.48 billion.
Now, let’s check the factors that are expected to have influenced the company’s third-quarter performance.
Key Factors and Estimates for Q3
Blackstone has been witnessing increases 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 subdued market volatility and lower client activity in the third quarter because of seasonality, and concerns over the economic slowdown, the Federal Reserve’s hawkish monetary policy and other geopolitical issues, Blackstone is expected to have recorded growth in the AUM balance in the quarter, driven by overall asset inflows.
The Zacks Consensus Estimate for Blackstone’s third-quarter AUM is pegged at $1.03 trillion, which indicates a rise of 7.9% from the prior-year quarter’s reported figure. Our estimate for total AUM is pinned at $1 trillion. The consensus estimate for total fee-earning AUM of $745 billion suggests a year-over-year rise of 5.5%. Our estimate for the same is pinned at $736.5 billion.
The Zacks Consensus Estimate for net management and advisory fees (segment revenues) for the to-be-reported quarter is pegged at $1.66 billion, which indicates a rise of 2.7% from the prior-year quarter. Our estimate for the same is $1.49 billion.
The consensus estimate for fee-related performance revenues (segment revenues) of $299 million suggests a decline of 19.6% from the prior-year quarter’s reported figure. Our estimate for the metric is pinned at $160.2 million.
Blackstone’s expenses have been elevated over the past few years mainly because of higher general, administrative and other expenses. As the company has been continuing to make investments in franchise, expenses are expected to have risen to some extent in the third quarter. Our estimate for total expenses (GAAP basis) is pinned at $1.58 billion, implying a year-over-year rise of 64.8%.
Here is what our quantitative model predicts:
According to our quantitative model, the chances of Blackstone beating the Zacks Consensus Estimate this time are low. This is because it does not have 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 -0.10%.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks That Warrant a Look
A couple of finance stocks that you may want to consider, as these have the right combination of elements to post an earnings beat in the upcoming releases per our model, are Wells Fargo (WFC - Free Report) and PNC Financial (PNC - Free Report) .
The Earnings ESP for Wells Fargo is +2.11% and it carries a Zacks Rank #3 at present. The company is slated to report third-quarter 2023 results on Oct 13. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PNC Financial is also scheduled to release third-quarter 2023 earnings on Oct 13. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +1.26%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.