Shares of Blackstone (NYSE: BX) jumped 6.8% on Thursday as the world’s largest alternative asset manager’s record fourth-quarter 2021 results surpassed analysts’ expectations. Results were driven by outstanding investment performance.
During the earnings call, Blackstone CEO Steve Schwarzman said, “At our Investor Day, a little over three years ago, we shared our vision of reaching $1 trillion of AUM in eight years. We now believe it will reach $1 trillion of AUM this year and half the time we predicted.”
Results in Detail
Blackstone reported distributable earnings of $1.71 per share, up 51% year-over-year, and significantly surpassed the Street’s estimate of $1.36.
Net income almost doubled to $1.4 billion from $748.9 million in the same quarter last year.
Moreover, total revenue grew 58.7% compared to the prior-year quarter to $5.76 billion. Management and advisory fees of $1.46 billion jumped 29.2%, while total investment income came in at $4.05 billion, up 62%.
Segment-wise, Real Estate recorded revenues of $2.25 billion, up 60.7% year-over-year. Additionally, Private Equity revenues grew 61.4% to $1.33 billion, while revenues at Credit & Insurance more than doubled to $454.5 million. Hedge Fund Solutions revenues rose 10% to $418.5 million.
As of December 31, 2021, total assets under management (AUM) stood at $880.9 billion, up 42% year-over-year, with fee-earning AUM of $650 billion, up 38%.
Furthermore, the company recorded inflows of $154.8 billion in the quarter and $270 billion for 2021.
For 2021, Blackstone reported distributable earnings of $4.77 per share, up 80% year-over-year. Also, total revenue more than tripled to $22.58 billion.
Outlook
During the earnings call, Blackstone COO Jon Gray said that approximately $150 billion in total is likely to be raised for 17 funds over the next 18 months, reflecting a 25% increase over the prior cycle. “We expect to start raising our two largest flagships, global real estate and corporate private equity, this quarter,” Gray added.
Capital Deployment
Blackstone declared a quarterly common dividend of $1.45 per share, to be paid on February 14 to shareholders of record on February 7.
During the quarter, the company repurchased 4.2 million common shares and 10.3 million common shares in 2021.
Wall Street’s Take
Following the fourth-quarter 2021 earnings update, Jefferies analyst Gerald O’Hara maintained a Buy rating on Blackstone and a price target of $157 (31.89% upside potential).
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 5 Buys and 3 Holds. The average Blackstone price target of $151.57 implies 27.33% upside potential. Shares have gained 3.4% over the past six months.
Bloggers Weigh In
TipRanks data shows that financial blogger opinions are 90% Bullish on BX, compared to a sector average of 71%.
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