For The Blackstone Group L.P.BX , 2016 has not particularly been a good year. The company's shares lost nearly 4% so far this year as against the Zacks categorized Investment Management industry's growth of 5%.
The year begun on sour note for Blackstone as revenues witnessed a decline owing to significant slump in capital markets across the globe (which led to deterioration in performance of its funds). Nonetheless, revenues rebounded in the third quarter, with the company now projected to record a 2.7% year-over-year rise for 2016.
Further, Blackstone's fee-earning assets under management (AUM) and total AUM persistently recorded strong growth, aided by increasing net inflows. Management expects low double-digit AUM growth and high-single-digits to low-double-digits growth in fee-earning AUM to continue. In addition, it anticipates fee related earnings to grow at a double-digit percentage rate in 2017.
Therefore, driven by these optimistic trends, the estimates for this Zacks Rank #3 (Hold) stock has been revised upward. Over the last 60 days, the Zacks Consensus Estimate was up 4.4% for 2016.
However, mounting expenses continue to make us apprehensive. Going forward, expenses are expected to rise owing to the company's well performing funds that require more headcount.
Moreover, the full implementation of capital regulations is likely limit Blackstone's ability to raise funds from banking institutions. Also, any future crisis, along with impending regulatory changes, would adversely affect revenue growth and the company's ability to generate cash flow.
Stocks to Consider
Goldman has witnessed an upward earnings estimate revision of 4.3% for the current year, over the past 60 days. Its share price has risen 69.9%, over the last six months. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
Zions carries a Zacks Rank #2 (Buy). It has witnessed an upward earnings estimate revision of 3.2% for the current year, over the past 60 days. Over the last six months, its share price is up 73.4%.
Schwab also carries a Zacks Rank #2. For the current year, over the past 60 days, its Zacks Consensus Estimate has been revised 1.6% upward. Its share price has increased 54.2% over the last six months.
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