To The Moon

$Blackstone Group LP(BX)$ is set to report its fiscal Q2 2025 earnings before the market open on Thursday, July 24, 2025.

Consensus EPS: Analysts are generally expecting a Distributable Earnings (DE) per share of around $1.09, representing a year-over-year increase of approximately 13.5%. (This can vary slightly across different analyst firms, with some estimates reaching up to $1.13 and lows around $1.07).

Revenue: The consensus revenue forecast for Q2 2025 is approximately $2.77 billion, up about 10.2% from the year-ago quarter.

Realization Update: Blackstone proactively provided an intra-quarter update on June 24, 2025, stating that they preliminarily expect to record total Realized Performance Revenues and Realized Principal Investment Income in excess of $425 million for the period from April 1 to June 24, 2025. This indicates that while the broader market might be challenging for exits, Blackstone is finding opportunities for profitable realizations.

Blackstone (BX) reported a robust fiscal Q1 2025, generally surpassing analyst expectations for key metrics despite a mixed picture on GAAP revenues and net income.

Blackstone (BX) Fiscal Q1 2025 Earnings Summary:

Beats on Earnings and Revenue (Non-GAAP/Segment basis):

Distributable Earnings (DE): $1.4 billion ($1.09 per share), an 11% increase year-over-year, and exceeding analyst forecasts.

Fee-Related Earnings (FRE): $1.3 billion ($1.03 per share), up 9% year-over-year.

Revenue (GAAP): $3.29 billion, which surpassed anticipated figures, although this represents an 11% decrease from Q1 2024.

Segment Revenues: $2.76 billion, up 8% year-over-year, beating consensus.

Strong AUM Growth and Inflows:

Total Assets Under Management (AUM): Reached a record high of nearly $1.2 trillion, a 10% increase year-over-year.

Inflows: Generated $61.6 billion in inflows during the quarter, the highest level in three years, and approximately $200 billion over the last twelve months. This reflects strong momentum across institutional, insurance, and private wealth channels.

Dry Powder: Ended the quarter with $177 billion in undrawn capital available for investment, positioning the firm well for future opportunities.

Segment Performance:

Credit & Insurance: Was a standout performer, with AUM up 21% year-over-year and significant inflows ($30.3 billion in Q1). Distributable earnings in this segment increased 76% year-over-year.

Private Equity: AUM increased 16% year-over-year.

Infrastructure: Posted a strong return of +7.5% in Q1.

Real Estate: Showed early signs of stabilization.

Shareholder Returns:

Declared a quarterly dividend of $0.93 per share.

Repurchased 0.2 million shares during the quarter.

GAAP Net Income: $614.9 million, down 27.1% from the prior-year quarter, primarily driven by lower GAAP revenues. This highlights the difference between GAAP accounting, which can be impacted by short-term market fluctuations in investment valuations, and the firm's core operating performance metrics like DE and FRE.

Lesson Learned from the Guidance Given:

Blackstone's guidance and commentary from the earnings call provide several key lessons:

Resilience in a Turbulent Market: Management emphasized that Blackstone's business model is built to navigate periods of uncertainty and dislocation. The significant portion of assets under management committed under long-term contracts and perpetual strategies provides stability.

Lesson: For alternative asset managers like Blackstone, a diversified and sticky capital base (perpetual capital) is crucial for weathering market volatility and ensuring consistent fee-related earnings, even if realization events (and thus performance revenues) slow down.

Strategic Deployment of "Dry Powder": The firm highlighted its substantial "dry powder" ($177 billion) as a key advantage, enabling it to capitalize on attractive investment opportunities that arise during periods of market dislocation. They are actively looking to deploy capital into areas with long-term secular tailwinds, such as digital infrastructure and life sciences.

Lesson: In uncertain economic environments, having ample liquidity and uncalled capital (dry powder) is a significant competitive advantage. It allows firms to be opportunistic buyers and make value-accretive investments when others might be constrained, setting the stage for future performance.

Growth in Private Credit and Private Wealth: Blackstone continues to lean into the expansion of its private credit platform and sees significant growth opportunities in the private wealth channel. Inflows from private wealth were up nearly 40% year-over-year.

Lesson: Diversification of funding sources beyond traditional institutional investors, particularly tapping into the growing private wealth segment, is a vital growth driver. Additionally, private credit remains a high-conviction area, offering attractive returns and illustrating the ongoing shift of capital from public to private markets.

Patience with Realizations: While deployment was strong, the company noted that more volatile markets might lead to slower realizations (asset sales) in the near term.

Lesson: Investment cycles in alternative assets are inherently long-term. Managers need patience and a disciplined approach to realize value. They won't be forced to sell assets in unfavorable market conditions, which protects returns for their limited partners (LPs). This reinforces the "invest patience, sell when the time is right" philosophy.

Focus on Secular Tailwinds: Blackstone is directing its new investments into sectors benefiting from long-term secular trends, rather than being solely reactive to short-term market movements.

Lesson: A forward-looking investment strategy that identifies and capitalizes on long-term structural shifts in the economy provides a more sustainable and robust path to growth compared to strategies highly reliant on short-term market timing.

Blackstone's Q1 2025 earnings demonstrated its ability to generate strong core earnings and attract capital even in a "turbulent market" (as CEO Stephen Schwarzman described it). The key lesson from their guidance is the importance of a resilient business model supported by long-term capital, significant dry powder for opportunistic investing, and a strategic focus on growth areas and secular trends to navigate and thrive through challenging economic cycles.

Analysis of Upcoming Fiscal Q2 2025 Earnings

Blackstone's performance in Q2 2025 will likely reflect the continued resilience of its business model, particularly in the face of ongoing macroeconomic shifts. The key will be how well it has converted its significant "dry powder" into new investments and whether its fee-generating AUM continues its upward trajectory.

Key Factors to Watch:

Assets Under Management (AUM) and Fee-Paying AUM (FPAUM):

Total AUM: Look for continued growth, building on the record nearly $1.2 trillion in Q1. This indicates the firm's ability to attract and retain capital.

Fee-Paying AUM (FPAUM): This is a critical driver of recurring management fees. Steady or increasing FPAUM signals stable revenue generation regardless of market performance.

Inflows: Strong inflows into various strategies (especially credit and private wealth) will demonstrate continued investor confidence and fuel future AUM growth.

Distributable Earnings (DE) and Fee-Related Earnings (FRE):

Distributable Earnings (DE): This is the most closely watched metric for alternative asset managers as it represents the cash available for distribution to shareholders. A beat on DE is usually viewed very positively.

Fee-Related Earnings (FRE): This measures the profitability of recurring management fees, net of related compensation and operating expenses. Consistent FRE growth indicates the stability and scalability of their core business.

Deployment and Realizations:

Capital Deployment: How much of the "dry powder" ($177 billion in Q1) has been invested during the quarter? Strong deployment indicates active deal-making and sets the stage for future performance fees.

Realizations: While Q1 saw some slowdown, the intra-quarter update on realizations is a positive sign. Investors will look for continued, albeit potentially selective, asset sales that generate performance revenue. The mix of realizations across different strategies (e.g., real estate vs. credit) will also be insightful.

Performance of Key Segments/Funds:

Credit & Insurance: This segment has been a strong performer. Look for continued growth in AUM and earnings from this area, especially given the current interest rate environment.

Real Estate: While challenges remain in some sub-sectors, any commentary on stabilization or recovery in real estate valuations, particularly related to their perpetual capital vehicles, will be important. Fund performance metrics (e.g., appreciation) for various segments will be key.

Private Equity & Infrastructure: Updates on the performance of their core private equity and infrastructure funds, including the "moneyness" of their carried interest, will impact future performance fees.

Perpetual Capital: Blackstone has a significant portion of its AUM in perpetual capital vehicles. Continued growth and performance in these funds provide a stable and long-term fee base.

Guidance for the Remainder of 2025: Any commentary on the macro environment, investment pipeline, fundraising outlook, and expectations for realizations and deployment for the second half of the year will be crucial for investor sentiment.

Opportunity for Trading Short-Term Post Earnings?

Trading Blackstone shares short-term around earnings can be volatile and carries significant risk. However, here's an analysis of potential opportunities:

Potential for Upside (Bullish Scenario):

Strong Beat on DE and FRE: If Blackstone significantly surpasses analyst estimates for Distributable Earnings and Fee-Related Earnings, the stock could see a strong positive reaction.

Robust Inflows and AUM Growth: Exceptional inflows, particularly from private wealth and insurance, demonstrating strong demand for their products, could fuel a rally.

Better-than-Expected Realizations: If the realization figure comes in materially above the pre-announced "in excess of $425 million" and/or if management expresses optimism about future exits, it could boost sentiment.

Positive Outlook/Guidance: Upbeat commentary on the investment environment, deployment opportunities, or an increase in full-year guidance would be a strong catalyst.

Stabilization/Improvement in Real Estate Valuations: Any definitive positive news regarding their real estate portfolio's performance could be a significant boost.

Potential for Downside (Bearish Scenario):

Miss on DE or FRE: Falling short of analyst expectations for these core profitability metrics would likely lead to a sell-off.

Slowdown in Inflows or AUM: Weakness in fundraising or a decline in AUM (especially FPAUM) would raise concerns about future fee generation.

Disappointing Realizations: If realizations are lower than anticipated or if management expresses significant caution about future exits, it could weigh on the stock.

Negative Outlook/Guidance: A cautious or downgraded outlook for the remainder of the year due to macro headwinds or a lack of compelling investment opportunities could result in a negative reaction.

Significant Write-downs: While less likely to be fully revealed in quarterly earnings, any hints of significant valuation write-downs in their portfolio, particularly in real estate, could trigger a sharp decline.

Blackstone (BX) Price Target

Based on 18 analysts from Tiger Brokers offering 12 month price targets for Blackstone Group in the last 3 months. The average price target is $162.35 with a high forecast of $202.00 and a low forecast of $132.00. The average price target represents a -4.15% change from the last price of $169.38

Trading Considerations:

Volatility: BX typically experiences significant price swings around earnings. The "implied straddle" (a measure of expected price movement) can be high, indicating that options traders anticipate a large move.

Analyst Sentiment: Pay attention to how analyst estimates have been revised in the weeks leading up to the report. A downward revision trend suggests higher expectations of a miss.

Technical Levels: Identify key support and resistance levels on the chart. These can act as targets or entry/exit points for short-term trades.

Pre-Earnings Run-up/Sell-off: If the stock has had a significant run-up into earnings, there might be profit-taking even on a decent report. Conversely, a pre-earnings sell-off could set the stage for a rebound on positive news.

Risk Management: Given the inherent volatility, strict risk management (e.g., stop-loss orders, appropriate position sizing) is crucial for any short-term earnings trade.

Conclusion for Short-Term Trading:

For short-term trading, Blackstone's earnings present a high-risk, high-reward scenario. While its business model is robust, market reactions to earnings often hinge on comparisons to analyst consensus and management's forward-looking commentary. Investors looking for short-term opportunities should have a clear thesis based on the key metrics, be prepared for significant volatility, and exercise stringent risk management.

Technical Analysis - Exponential Moving Average (EMA)

I think BX Q2 earnings focus on how well it has converted its significant "dry powder" into new investments would play a big role on how he share price would move after its earnings release, as we can see that BX though is trading in a positive RSI momentum, we can see signs of consolidation.

So if there is an earnings beat and better report on how well it has converted its significant "dry powder" into new investments and also its fee-generating AUM continues its upward trajectory. This could potentially create a gap up in the share price.

But we need to also look at the potential downside when weakness in fee-related earnings or a more cautious outlook on future deal-making or realizations could create a downward movement.

Summary

Given the current market sentiment and Blackstone's prior positive momentum in inflows and deployment, a beat on DE and continued strong AUM growth could lead to an upward move.

However, any signs of weakness in fee-related earnings or a more cautious outlook on future deal-making or realizations could lead to a swift correction.

Appreciate if you could share your thoughts in the comment section whether you think BX could report a better deployment of its significant “dry powder” into new investment and its fee-generating AUM continues its upward trajectory.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.