On Sep 18, 2013, we reaffirmed our long-term Neutral
The Blackstone Group L.P.
). Though the company reported strong second-quarter 2013
results, we remain concerned about the prevalent capital market
volatility and the impact of stringent regulations on the
company's financial performance in the near term.
On Jul 18, Blackstone reported second-quarter 2013 economic net
income (ENI) of 62 cents, substantially beating the Zacks
Consensus Estimate of 52 cents. Results were aided by top-line
growth, partially offset by higher operating expenses. Steady
assets under management (AUM) and improved balance sheet were the
other tailwinds for the quarter.
The Zacks Consensus Estimate for 2013 advanced 1.0% to $2.37 per
share over the last 60 days. Further, for 2014, the Zacks
Consensus Estimate increased 2.2% to $2.83 per share over the
same time period. Hence, Blackstone currently carries a Zacks
Rank #2 (Buy).
Blackstone's diversified footprints across the globe, along with
its strategically planned acquisitions will continue to boost
top-line growth in the upcoming quarters. Fee-earning AUM and
total AUM consistently showed strong growth, and constitute the
Moreover, at a time when most firms are undertaking cost
reduction initiatives to lower operating expenses, Blackstone has
been witnessing a decline in total expenses without resorting to
AFFIL MANAGERS (AMG): Free Stock Analysis
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However, increased dependence on primarily management and
advisory fees could dent the company's financials in the near
term, if it witnesses any change in the managed assets,
regulatory changes or a slowdown in business activities. Further,
returns from investments are expected to remain slow in the near
term due to sluggish economic recovery.
Other Stocks Worth Considering
Other stocks worth a look include
GAMCO Investors, Inc.
Affiliated Managers Group Inc.
Ameriprise Financial, Inc.
). While GAMCO Investors carries a Zacks Rank #1 (Strong Buy),
Affiliated Managers Group and Ameriprise Financial carry the same
Zacks Rank as Blackstone.