On Jun 24, 2013, we downgraded our recommendation on
The Blackstone Group L.P
) to Neutral from Outperform. Though the company reported
better-than-expected first-quarter 2013 earnings, anticipation of
slow investment realization in the near future led to the
Blackstone's first-quarter 2013 economic net income (ENI) came in
at 55 cents per share, beating the Zacks Consensus Estimate by a
penny. Moreover, this compares favorably with ENI of 44 cents per
share recorded in the year-ago quarter. Results were aided by
substantial top-line growth, offset by higher operating expenses.
Steady assets under management (AUM) and improved balance sheet
were the other positives for the quarter.
Following the result release, the Zacks Consensus Estimate went
up by 1.8% to $2.30 per share over the last 60 days. However, for
2014, the Zacks Consensus Estimate went down by 0.7% to $2.69 per
share over the same time frame. The company currently has a Zacks
Rank #3 (Hold).
Blackstone's strong presence across the globe due to continuous
acquisitions and its ability to contain expenses without
resorting to any cost reduction initiatives have resulted in the
top-line improvement. Moreover, Blackstone's solid fee-earning
AUM and total AUM demonstrate its strong growth, further aided by
increasing net inflows.
However, Blackstone's increased dependence on management and
advisory fees could adversely affect the company's revenue
generating capacity in the near term, if it witnesses any
regulatory changes or a slowdown in business activities.
Moreover, stringent regulations and ongoing capital market
volatility can adversely affect the company's financials going
Other Major Banks to Consider
Some better performing stocks include
GAMCO Investors, Inc
Noah Holdings Limited
Virtus Investment Partners, Inc.
). All these carry a Zacks Rank #1 (Strong Buy).
BLACKSTONE GRP (BX): Free Stock Analysis
GAMCO INVESTORS (GBL): Free Stock Analysis
NOAH HLDGS LTD (NOAH): Free Stock Analysis
VIRTUS INVESTMT (VRTS): Free Stock Analysis
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