Blackstone stock price: BX is a good buy ahead of Q1 earnings

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The Blackstone (NYSE: BX) stock price has crawled back in the past few days as investors wait for the upcoming quarterly earnings. The shares rose to a high of $87, which was ~20% above the lowest point this year. Other private equity stocks like Carlyle, KKR, and Brookfield have also underperformed in 2023.

Blackstone earnings preview

Private equity companies have been under pressure in 2023 as the industry goes through major headwinds. For one, the biggest PE firms have an exposure to the troubled real estate industry. 

As I wrote in this article, the commercial real estate industry is going through one of the biggest weaknesses on record. The industry is facing a triple whammy of high-interest rates, nearing maturities, and high vacancies in offices as companies embrace a hybrid model. 

Blackstone has a big exposure to the real estate industry, where it is the biggest landlord in the US. Its real estate division has over $277 billion in assets under management. Therefore, with REIT stocks plunging and Blackstone’s BREIT outflows continuing, there are concerns about the company’s financial situation. Despite this, Blackstone recently raised $30 billion for its real estate fund.

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Blackstone is also struggling as higher interest rates slow the pace of dealmaking in the US and around the world. The volume of M&A and IPOs has been falling recently as liquidity in the financial sector has dried up recently. 

Therefore, this week’s earnings will be watched closely because they will provide more information about the company’s state. They will also provide the company an opportunity to showcase growth of its assets under management.

Analysts expect that Blackstone’s revenue for the quarter will come out at $2.4 billion, higher than the previous quarter’s increase of $6.2 billion. Its EPS is expected to come in at 97 cents. As shown below, analysts have been boosting their revenue and profitability estimates in the past few weeks.

Blackstone stock price technical analysis

BX chart by TradingView

The 4H chart shows that the BX stock price has been drifting upward in the past few days. The shares have pumped from a low of $77.32 to the current $87. Along the way, the stock has risen above the 25-period and 50-period moving averages.

Blackstone shares are also approaching the important resistance at $88.58, the highest point on March 31st. This price is also a few points below the 50% Fibonacci Retracement level. Therefore, there is a likelihood that the shares will have a bullish breakout to $90 after earnings. This view is consistent with my recent forecast for private equity stocks.

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