Should you buy Blackstone shares in Q3 after smashing Q2 expectations?

on Jul 22, 2021
  • Blackstone shares surged nearly 4% on Thursday after announcing better than expected results.
  • The investment management company’s distributable earnings grew by more than 90% Y/Y to beat estimates.
  • Should you invest in Blackstone Group stock now?

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Blackstone Group Inc. (NYSE:BX) reported its fiscal Q2 results on Thursday before markets opened, beating analyst expectations on earnings. BX posted solid bottom-line growth of more than 90% to $0.82 per share. On the other hand, the Street analysts expected an EPS of $0.79.

The company’s total assets under management grew to $684 billion, up from $649 billion at the end of Q1. Blackstone’s fee-earnings AUM also posted significant growth, increasing to $498.9 billion, up from $481.2 billion Q/Q. It added $37.3 billion versus $31.6 billion in Q.

Chairman and CEO Stephen A. Schwarzman said:

Strong investment performance and our culture of innovation have allowed us to meaningfully broaden the clients we serve, including individual investors and insurance companies, and the types of investments we can make.

Are Blackstone shares a buy in Q3 2021?

Although the Blackstone stock price is up more than 74% this year, the company’s shares still trade at an attractive P/E ratio of 21.39. Thus, BX stock will still be compelling to value investors this year. 

Furthermore, analysts expect Blackstone earnings to grow at an average of 21% over the next five years, making the stock another target of growth investors. 

Therefore, it may not be too late to buy Blackstone shares since the stock looks relatively undervalued and promises solid growth over the next five years.

Source – TradingView

Technical overview: Blackstone Group stock price forecast for Q3 2021

Technically, Blackstone shares appear to have rallied to overbought conditions in the 14-day RSI. The stock price also made a bullish breakout from an ascending channel formation after Thursday’s upward price gap. Therefore, it seems a short-term pullback is imminent.

However, given the company’s impressive Q2 results, the BX bull-run could continue further. And looking into the future, the earnings growth expectations next year and over the next five years will push the price higher.

As such, investors can target extended gains at approximately $115.10 or higher at $120.00. The support levels are $104.30 and $99.37.

Bottom line: the case for buying Blackstone shares now

In summary, although Blackstone stock price has crossed to overbought conditions, shares still trade at an attractive P/E ratio. In addition, its latest quarterly results showed significant improvement both on Q/Q and Y/Y basis. 

Therefore, the current bull run could continue further before the BX stock price pulls back.