Should you buy Blackstone shares as it agrees to sell Cosmopolitan for $5.65 billion?

On Monday, Blackstone Inc. (NYSE:BX) shares declined by about 2% after agreeing to sell the Metropolitan casino and hotel business in a deal with $5.65 billion. MGM Resorts International (NYSE:MGM) is buying the hotel and casino business for $1.6 billion, while Blackstone real estate investment trust will acquire the real estate property for $4 billion.

According to Blackstone’s letter reviewed by the Wall Street Journal, the private equity firm will net $4.1 billion in profit and cash flows from the casino and hotel operations. The company bought the property for $1.8 billion seven years ago and spent an additional $500000 in upgrades and renovations.

Is Blackstone a good stock to buy in Q4 2021?

From a valuation perspective, Blackstone shares trade at a relatively steep forward P/E ratio of 28.43 compared to the trailing P/E of 19.31. Therefore, the stock may not be appealing to value investors.

Moreover, analysts expect its earnings per share to plunge by more than 50% this year before rising at an average annual rate of about 16.16% over the next five years. As a result, long-term growth investors could find Blackstone shares as an exciting opportunity.

Is Blackstone pullback an opportunity to buy?

Technically, Blackstone shares appear to have recently pulled back after hitting new historical highs. The stock recently rallied to trade at about $136.88 before pulling back to $122.24.

However, with shares yet to hit the oversold conditions of the 14-day RSI, the pullback could continue to the foreseeable future. Therefore, investors can target extended short-term pullbacks at $116.71 or lower at $109.44. On the other hand, $128.93 and $135.47 are critical resistance zones.

Bottom line: It is not too late to short BX shares

In summary, although Blackstone looks like an exciting long-term growth stock, investors could still capitalize on short-term turbulence by shorting the stock on the downward movement.

Moreover, with shares yet to reach the oversold conditions of the 14-day RSI, there is more room to run before retesting the key support levels.