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On Thursday, Keefe, Bruyette & Woods analyst Paul Johnson adjusted the price target for Blackstone (NYSE:BX) Secured Lending Fund (NYSE: BXSL) shares, increasing it to $32.00 from the previous $30.50. The firm maintained a Market Perform rating on the stock. Johnson’s evaluation followed Blackstone’s recent earnings report, which, despite falling short of expectations, was considered stable by the analyst.
Johnson noted the earnings miss for Blackstone Secured Lending Fund was largely due to an increased share count. This resulted in a portfolio yield decrease of 80 basis points, which placed pressure on the interest income. The company maintains strong profitability with a P/E ratio of 8.88x and impressive revenue growth of 17.3% over the last twelve months, as revealed by InvestingPro’s comprehensive analysis. Additionally, minor portfolio depreciation was offset by the benefits of accretive share issuance and operating earnings that surpassed the dividend payout.
The analyst highlighted the company’s robust credit profile, with less than 1% of investments categorized as stressed and only a slight increase in investments on Keefe, Bruyette & Woods’ watchlist. Johnson also mentioned Blackstone’s positive outlook regarding mergers and acquisitions (M&A), noting that the company experienced one of its most active deployment quarters since the fourth quarter of 2021.
In conclusion, while Keefe, Bruyette & Woods slightly lowered their earnings estimates for Blackstone Secured Lending Fund due to the tightening yield, the firm’s raised price target reflects a positive assessment of the company’s stable performance and prospects.
In other recent news, Blackstone Secured Lending Fund reported its Q4 2024 earnings, revealing an earnings per share (EPS) of $0.84, which narrowly missed the forecast of $0.85. Despite this slight shortfall, the company demonstrated strong financial performance with a 16% year-over-year increase in total investment income, reaching $49 million. Additionally, the Net Asset Value (NAV) per share increased to $27.39, reflecting a 0.4% rise from the previous quarter. The fund also led significant financing deals, including a $2 billion debt financing for Dropbox (NASDAQ:DBX). Analysts have noted that Blackstone Secured Lending Fund’s stock experienced a cautious investor response following the earnings miss. The fund’s strong credit performance and strategic investment capabilities were underscored by a 12.3% annualized return on equity. Looking ahead, Blackstone Secured Lending Fund remains optimistic about the private credit market’s potential and anticipates increased M&A activity by late Q2 2025.
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