CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We see BX facing a moderating outlook, with higher-for-longer rates impacting fee earnings, fundraising, and investment realizations. Using a narrower risk premium, we lower our target by $18 to $107 on a forward P/E of 18.8x, in line with the five-year historic average at 18.7x. Based on distributed earnings, we lower our EPS estimates in 2023 by $0.40 to $4.00 and ’24’s by $0.35 to $5.70, both below the consensus. BX posted Q3 2023 EPS of $0.94, a $0.10 earnings miss. Revenue declined 10% Y/Y in Q3 2023. We see total revenue of $10.85B in 2023 and $14.2B in 2024. For industry-realized financial metrics, performance revenues were -28% Y/Y, performance compensation -35%, and principal investment income -60%. Fund net inflows were only +$25B with the largest contributors in credit and insurance (+$10B) and real estate ($9B). AUM was $1.0T (+6%), fee earning AUM $735B (+4%), and perpetual capital $388B (+8%). Dry powder to invest available funds was $201B — an opportunity when macro conditions improve.