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Blackstone (BX) Q4 Earnings: What's in Store for the Stock?

The Blackstone Group L.P.BX is scheduled to report its fourth-quarter and 2016 results before the opening bell on Thursday, Jan 26.

Last quarter, the company reported a positive earnings surprise of 11.8%. Better-than-expected results were attributable to a significant rise in revenues, partially offset by higher expenses.

The earnings beat and the Trump-induced rally led to improved price performance for Blackstone. For the three-months ended Dec 31, 2016, the company's shares gained 7.3%.

Moreover, Blackstone has a decent earnings surprise history, as evident from the chart below:

The Blackstone Group L.P. Price and EPS Surprise

The Blackstone Group L.P. Price and EPS Surprise | The Blackstone Group L.P. Quote

What to Expect in Q4?

On the expense side, the overall uptrend in costs is anticipated to have continued in the fourth quarter. This is due to higher compensation and benefit costs, as the company's well-performing funds require more headcount.

Further, flow trends are expected to remain weak during the quarter. As such Blackstone is likely to record a slowdown in inflows.

Blackstone remains comparatively immune to the prevalent low interest rate environment as it chiefly deals in asset management and private equity businesses. Also, the company continues to expand its investment activity to capitalize on public market dislocation and should report higher deployment of capital during the quarter.

Furthermore, with the improvement in the overall economic scenario, the company's fund-raising ability should aid the uptrend in its fee-earning AUM (assets under management) and total AUM. This will lead to stable or improving fee income for the company.

Also, Blackstone's activities during the quarter seem to have won the analysts' confidence. As a result, the Zacks Consensus Estimate for the quarter has risen 4.9% to 64 cents, over the past 30 days.

Earnings Whispers

Our proven model indicates that Blackstone is less likely to beat the earnings estimates this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least #2 (Buy) or #3 (Hold) for this to happen.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Earnings ESP for Blackstone is -1.56%. This is because the Most Accurate estimate of 63 cents is lower than the Zacks Consensus Estimate of 64 cents.

Zacks Rank: Blackstone's Zacks Rank #2 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of a positive earnings surprise.

Stocks that Warrant a Look

Here are some stocks you may want to consider as our proven model shows they have the right combination of the elements to beat earnings this season.

SEI Investments Co. SEIC is scheduled to report results on Jan 25. The company has an Earnings ESP of +6.00% and carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Raymond James Financial, Inc. RJF has an Earnings ESP of +1.00% and carries a Zacks Rank #2. The company is slated to release results on Jan 25.

T. Rowe Price Group, Inc. TROW has an Earnings ESP of +2.16% and carries a Zacks Rank #3. It is scheduled to report results on Jan 26.

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The Blackstone Group L.P. (BX): Free Stock Analysis Report

SEI Investments Company (SEIC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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