Fed’s Powell opens door to potential rate cuts at Jackson Hole
On Monday, UBS analyst Brennan Hawken upgraded shares of The Blackstone Group (NYSE:BX) from Neutral to Buy, setting a price target of $180.00. Currently trading at $140.89 with a market capitalization of $172 billion, the stock appears undervalued according to InvestingPro analysis. Hawken’s optimistic outlook is based on the belief that the recent market sell-off, which saw Blackstone’s shares decline by 27%, presents an opportunity to invest in a leading alternative investment platform at what he considers a reasonable valuation.
Blackstone’s resilience amidst concerns over redemption restrictions in its non-traded REIT, BREIT, from 2022-2024 was highlighted as a key factor in the upgrade. With an InvestingPro Financial Health Score rated as "GOOD" and a strong Altman Z-Score of 5.04, Hawken noted that despite the negative press and investor worries, Blackstone’s dominant market position remained intact. This was attributed to both its strong market presence and proactive management during the period.
The UBS analyst pointed out that Blackstone’s solid investor experience in BREIT, especially when compared to other real estate products, could lead to increased wealth management fundraising. Supporting this outlook, the company has demonstrated impressive revenue growth of 64.79% over the last twelve months, while maintaining a 4.09% dividend yield. This potential growth is seen as a result of retail alternative allocations expanding in the coming years. Hawken’s analysis anticipates that these allocations could rise from low single digits to high single digits percentage-wise.
Further strengthening Blackstone’s outlook is its multi-year investment in distribution and product innovation, which Hawken believes has solidified the firm’s competitive edge. According to UBS, these strategic moves are expected to drive mid-teens fee-related earnings growth through fiscal year 2026. With analyst targets ranging from $147 to $233, the growth projection is supported by an anticipated acceleration of inflows into perpetual investment vehicles and a doubling of the current retail fundraising rate, which stands at approximately $2 billion per month. For deeper insights into Blackstone’s valuation and growth metrics, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Blackstone has successfully raised $8 billion for a commercial real estate debt fund, marking a significant development in the property market’s recovery. This fund, known as Blackstone Real Estate Debt Strategies V, will operate across North America, Europe, and Australia, and is tied for the largest of its kind, matching a previous record set by Blackstone in 2020. The firm has also been involved in plans to sell approximately $395 million in commercial real estate loans in the New York area, a move that involves a joint venture with the Canada Pension Plan Investment Board and Rialto Capital. Meanwhile, Blackstone is exploring strategic options for Hello Sunshine, a media company under its Candle Media portfolio, which may include a potential merger to expand its reach.
Stephen Schwarzman, CEO of Blackstone, expressed support for U.S. tariffs, suggesting they could boost manufacturing growth, and highlighted the firm’s plans to double its assets under management in India. Blackstone is eyeing opportunities in India’s infrastructure sector, including data centers and renewable energy. Additionally, Blackstone’s new real estate debt fund is designed to capitalize on current market conditions by providing loans and purchasing existing loans, often in partnership with banks. These recent developments underscore Blackstone’s active role in various sectors, including real estate, media, and infrastructure.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.