Alternative investment management major Blackstone Inc. (NYSE: BX) recently revealed that it has completed the acquisition of Crown Resorts Ltd. for $6.3 billion. Crown Resorts owns and operates numerous resorts in Perth, Melbourne and Sydney.
The buyout reflects the fact that Blackstone is betting big on the global travel industry, which is recovering from the prolonged impact of the pandemic.
Blackstone believes that the demand for the company’s resorts will rise on the back of the increase in air travel.
Blackstone’s Head of Real Estate in Asia, Chris Heady, said, “There’s a collective sense of wanting-to-get back out there.”
Post the acquisition, Blackstone is looking to improve the overall services offered in its resorts, with a special focus on food quality and beverage offerings.
Further, to win regulators’ trust, Blackstone has assured that Crown Resorts will not deal with junket operators, who brought high-spending gamblers to Australia, and also look into effectively addressing the money laundering problems of the resort operator.
Recently, Goldman Sachs analyst Alexander Blostein reiterated a Buy rating on the stock with a price target of $112, which implies upside potential of 19.1% from current levels.
Overall, the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on seven Buys and four Holds. BX’s average price forecast of $144 implies that the stock has upside potential of 53.1% from current levels. Shares have gained marginally over the past year.
Investors Are Positive
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on BX, as 6.5% of the top portfolios tracked by TipRanks increased their exposure to BX stock over the past 30 days.
With economies reopening and resorts back in business, Blackstone’s move to acquire Crown Resorts has come at a very opportune time. However, Crown Resorts has been mired by numerous headwinds, including its battle with regulators regarding money laundering investigations. This can be an area of concern for Blackstone.
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