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Blackstone Group (BX) PT Cut To $17 By Deutsche Bank, 'Buy' Maintained

 April 20, 2012 08:09 PM
 


(By Balasheshan) Deutsche Bank (DB) lowered its price target on shares of Blackstone Group L.P. (NYSE:BX) to $17 from $19, while maintaining its "Buy" rating.

The brokerage said lighter performance fees lead to the company's first quarter miss, but assets under management/fee paying assets under management rising. BX reported economic net income per unit of $0.39, a bit below DB's/Street estimates of $0.46/$0.40.

Top line results were driven by rising management fees (up 17% sequential), mostly offset by lower advisory and transaction fees (down 32% sequential), while performance fees ($386 million versus $358 million in last quarter) and investment income ($83 million versus $56 million in last quarter) increased sequentially, but were lower than expected.

[Related -The Blackstone Group L.P. (BX): Is A Smart Housing And Private Equity Play]

Core expenses were well controlled (up 1% sequential), but the flattish core fee revenues drove some fee related earnings margin pressure.

Despite the miss, it was a decent quarter that included healthy fee paying assets under management growth (up 14% sequential with strong inflows) and solid portfolio appreciation.

Given BX's diversified model, healthy fundraising/returns, and attractive growth opportunities, the brokerage likes the long-term risk/reward and maintained its rating.

BX closed Friday's regular trading down 1.34% at $13.95.

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