Blackstone (NYSE:BX) shares tumbled more than 7% Thursday after the company missed third-quarter consensus earnings and revenue expectations.
The company reported Q3 EPS of $0.94, $0.09 worse than the analyst estimate of $1.03, while revenue for the quarter came in at $2.32 billion, below the consensus estimate of $2.66B.
Despite the miss, the company's CEO, Stephen Schwarzman, said the firm delivered a "resilient third quarter" despite challenging markets.
"Our investors continue to benefit from our strong sector selection — nearly all of our flagship strategies outperformed public benchmarks," he added. "Our exceptional long-term track record, unique breadth and the power of our brand allowed us to raise over $25 billion of capital, and we are well positioned with record dry powder of $200 billion to deploy in a dislocated environment."
Reacting to the report, analysts at CFRA downgraded BX to Hold from Buy, trimming the 12-month price target by $18 to $107 per share.
"We see BX facing a moderating outlook, with higher-for-longer rates impacting fee earnings, fundraising, and investment realizations," the analysts noted.
"Fund net inflows were only +$25B with the largest contributors in credit and insurance (+$10B) and real estate ($9B). AUM was $1.0T (+6%), fee earning AUM $735B (+4%), and perpetual capital $388B (+8%). Dry powder to invest available funds was $201B -- an opportunity when macro conditions improve," the analysts added.
At Deutsche Bank, analysts said they view the results as broadly below their expectations. However, while they "see the 3Q results as a bump in the road," the investment bank thinks "investors will focus heavily on the forward outlook for fundraising and deployment especially, as well as the sustainability of strong investment performance."
"We see the 3Q results and the risk of a slower 4Q backdrop as pressuring the stock today," the analysts added. "This said, we remain very positive on Blackstone's long-term position within the alternative management sector, including its strong fundraising & FRE growth profile relative to peers. We would view any weakness in the stock as a long-term buying opportunity."