On Apr 3, 2013, we reiterated our long-term recommendation on The Blackstone Group LP (BX) at Outperform. The reaffirmation is based on the company’s continuing organic and inorganic growth prospects as well as better-than-expected fourth quarter results.
Why Outperform?
Blackstone is scheduled to announce its first quarter 2013 results on Apr 18. The Zacks Consensus Estimate for the quarter is pegged at 53 cents per share. The Zacks Earnings ESP (Read: Zacks Earnings ESP: A Better Method) for Blackstone is +7.55% for the first quarter. This, along with its Zacks Rank #3 (Hold), makes it likely for the company to report a positive earnings surprise.
Over the past 60 days, the Zacks Consensus Estimate for 2013 inched up 1.9% to $2.20 per share while the Zacks Consensus Estimate for 2014 was down by a penny to $2.63 over the same period.
Blackstone’s diversified revenue mix and footprints, cost containment efforts as well as steadily increasing asset under management (AUM), will supplement its future growth. Further, the modestly improving economic condition will aid the company’s fund raising ability, though regulatory changes would have a somewhat mitigating impact.
Additionally, Blackstone’s fourth quarter economic net income per share outpaced the Zacks Consensus Estimate by 25.5%. Better-than-expected results were primarily driven by its top-line growth, partly offset by a rise in operating expenses.
Other Stock Worth Considering
Although we prefer Blackstone, there are other investment management stocks worth a look. These include Ameriprise Financial Inc. (AMP), Invesco Ltd (IVZ) and BlackRock, Inc. (BLK). All these carry a Zacks Rank #2 (Buy).
AMERIPRISE FINL (AMP): Free Stock Analysis Report
BLACKROCK INC (BLK): Free Stock Analysis Report
BLACKSTONE GRP (BX): Free Stock Analysis Report
INVESCO LTD (IVZ): Free Stock Analysis Report
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