Blackstone Stock Falls 14% YTD: Buying Opportunity or Warning Sign?

Blackstone BX, one of the world’s largest alternative asset managers, has faced growing investor skepticism in recent months. The stock has declined 14% year to date, significantly underperforming the S&P 500’s modest 0.4% fall. Additionally, BX’s close peers – KKR & Co. Inc. KKR and Apollo Global Management, Inc. APO – have fared slightly better in the same time frame.BX’s YTD Price Performance Image Source: Zacks Investment ResearchAmid this underwhelming performance, the key question arises: is Blackstone a compelling investment opportunity at current levels, or is caution still warranted? Let’s take a look.Major Factors at Play for BlackstoneBlackstone’s first-quarter 2025 performance was impressive, with top and bottom lines beating the Zacks Consensus Estimate. Additionally, total assets under management (AUM) amounted to $1.17 trillion, up 10% year over year. The rise was primarily driven by $61.6 billion of inflows. Despite performing impressively in the first quarter, Blackstone faces several headwinds, including tighter credit markets, higher-for-longer interest rates, slower deal activity in private equity and real estate, reduced realizations adversely impacting performance fees and concerns about exit opportunities. Apart from these, the biggest factor influencing BX’s financials will likely be the ongoing uncertain operating backdrop because of the Donald Trump administration’s trade policy. On the first-quarter conference call with analysts, management noted that deal activities are expected to remain muted for the time being as the tariff plans have led to heightened ambiguity. This has also resulted in caution in the IPO market. The situation has changed somewhat since then, with the announcement of the trade talks with several countries, including China. But the overall uncertainty and market volatility still prevail, as there hasn’t been any final decision on the tariff plans. Against such an environment, it will not be easy for Blackstone to record growth in transaction advisory revenues and net realized performance income.Meanwhile, as of March 31, 2025, the undrawn capital available for investment or “dry powder” was $177.2 billion.BX’s Dry Powder at Q1-end Image Source: Blackstone Inc.With substantial investable capital, Blackstone is well-positioned to take advantage of market dislocations. The company maintains a strong long-term conviction in key sectors such as digital infrastructure, energy and power, life sciences, alternatives and the recovery in commercial real estate. Additionally, accelerating growth in India and Japan offers attractive opportunities, supporting a strategic deployment of capital.Further, in April, Wellington, Vanguard and Blackstone announced the formation of an alliance to develop simplified multi-asset investment solutions combining public and private markets. Aiming to broaden investor access to institutional-quality portfolios, the collaboration leverages each firm’s strengths to address long-term diversification and return challenges in wealth and asset management.Analyst Sentiments Bearish for BlackstoneOver the past week, the Zacks Consensus Estimate for earnings for 2025 and 2026 has moved lower to $4.77 and $6.35, respectively. The consensus estimate for earnings indicates 2.8% and 33.1% growth for 2025 and 2026, respectively.Blackstone Earnings Estimates Image Source: Zacks Investment ResearchBX’s Valuation AnalysisBlackstone stock is currently trading at a 12-month trailing price-to-tangible book (P/TB) of 6.94X, which is above the industry’s 3.47X. This shows the stock is expensive.Price-to-Tangible Book Ratio (TTM) Image Source: Zacks Investment ResearchBX stock is trading at a premium to KKR & Co. and Apollo Global. At present, KKR & Co. has a P/TB of 2.08X and Apollo Global’s P/TB is 3.21X.Is Blackstone Stock Still a Buy?Blackstone stock’s downward trajectory and premium valuation raise legitimate concerns for investors. Additionally, macroeconomic uncertainty and other headwinds are likely to weigh on the company’s near-term financial performance.Nonetheless, Blackstone’s significant deployable capital and ongoing expansion initiatives could serve as key growth catalysts. That said, given the current challenges, a cautious approach is advisable, with careful consideration of recent developments before making any investment decisions. With a Zacks Rank #4 (Sell), BX remains a stock to avoid until clearer recovery indicators emerge.You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Blackstone Inc. (BX): Free Stock Analysis Report KKR & Co. Inc. (KKR): Free Stock Analysis Report Apollo Global Management Inc. (APO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks