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