Blackstone stock price could dive 22% before rebounding

Blackstone stock price had another solid performance as it outperformed the S&P 500 and Nasdaq 100 indices. BX jumped by 31% in 2024, pushing its market cap to over $212 billion and making it the biggest player in the alternatives industry.

Blackstone’s business is thriving

Blackstone, the biggest alternative asset management industry player, is thriving, helped by strong inflows and its success in the private credit sector.

Its annual financial results show that the total revenue has been in a slow uptrend after peaking at over $22 billion during the post-Covid boom when it made $22.1 billion. 

Blackstone’s annual revenue in 2023, while its trailing twelve-month (TTM) figure has moved to $11.1 billion. 

The company has continued to gather assets across all its businesses. Its last financial results showed that its fee-earning assets under management (AUM) rose to over $820 billion, while the perpetual capital stood at $434 billion.

The inflow surge accelerated in the last quarter as the company added over $40.5 billion to its business. It added $166 billion in the last twelve months, a figure that will continue growing as demand for alternative assets rise. 

This has translated into Blackstone reporting strong financial results. The most recent results showed that Blackstone’s management and advisory fee rose by 8% to $1.78 billion, bringing the nine-month figure to over $5 billion. 

Fee-related performance revenue retreated slightly to $264 million. Its total revenue rose to over $3.6 billion, while the total income was $1.8 billion. Blackstone made a profit of more than $4 billion in the first nine months of the year. 

The company is also returning substantial sums of money to its shareholders. It paid $3.45 in the LTM period and repurchased 4.1 million shares. All this has made Steve Schwarzman, who owns a substantial part of the company, fabulously wealthy, with a net worth of over $53 billion. 

Tailwinds and risks ahead

Blackstone stock price may do well in 2025, helped by numerous tailwinds. The upcoming Trump administration is expected to favor deal-making, which may help Blackstone increase its realizations. 

This is unlike the Biden administration when the Justice Department and the FTC sued to block several deals. 

Blackstone may also benefit as interest rates continue falling. Companies in the private equity business thrive in low-rate environments because it lowers their borrowing costs as they make acquisitions. 

Low rates will also benefit Blackstone’s real estate franchise, which has over $325 billion in investor capital. Its global real estate portfolio is valued at over $602 billion. Blackstone may also benefit from reduced regulations in the next few years. 

However, the main concern is that the company is highly overvalued since it has a forward P/E ratio of 39 and a non-GAAP multiple of 40. These are substantially high multiples for a company whose business is not growing as fast as top tech companies like Microsoft and Google.

Read more: Blackrock vs Blackstone: which is a better stock to buy?

Blackstone stock price analysis

BX stock chart | Source: TradingView

The weekly chart shows that the BX share price peaked at $201 this year and then retreated to the current $170. It remains above all moving averages and the crucial resistance level at $134.3, the upper side of the cup and handle pattern.

The stock’s outlook is bearish for now. It will need to mean revert by falling close to the 100-week moving average and retest the upper side of the cup at $134.3. A break and retest are among the most bullish patterns in the market. Therefore, the stock will drop by 22% and then resume the uptrend in 2025.

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