It's time to buy the dip in this private equity stock, analysts say

Published Fri, Oct 20 202310:00 AM EDTUpdated Fri, Oct 20 20231:42 PM EDT

Jesse Pound @/in/jesse-pound @jesserpound

Multiple Wall Street analysts are sticking by their bullish calls on Blackstone despite a disappointing third quarter, telling investors that now is the time to buy the stock. Shares of Blackstone fell nearly 8% Thursday after earnings and revenue came in short of estimates, according to FactSet's StreetAccount. The stock is now down 18% since its recent high on Sept. 19. BX 3M mountain Blackstone's stock has fallen sharply over the past month. But Oppenheimer analyst Chris Kotowski said in a note to clients Friday that the move in the alternative asset manager's stock is an overreaction and that investors should buy the dip. "BX shares are down ~8% on earnings day (vs S & P 500 down ~1%) and our message is simple: This is one of those opportunities the market occasionally hands you when people freak out about nothing," said Kotowski, who has an outperform rating and a $105 price target on the stock. That is down from $107 previously but still almost 11% above where Blackstone shares closed Thursday. "Investing in the private equity (PE) based 'Alts' requires taking a long view; there is quite literally almost nothing about the future to be divined from a single quarter. Trying to do so is essentially like trying to project the winner of the world series from the first inning of the first game," Kotowski added. Bank of America analyst Craig Siegenthaler also kept his buy rating on the stock, saying in a note to clients that Blackstone's growth should reaccelerate in 2024. "Blackstone (BX) has been exhibiting relative strength — including with its strong investment performance (especially in private credit and infrastructure). The next macro headwind will likely come from rising defaults in 2024, but we believe BX is well-positioned given its portfolio constructions (almost no CRE office, low LTVs in credit) and low starting point (defaults/nonaccruals). Challenging periods are when we expect BX to outperform and take market share," Siegenthaler said. The Bank of America analyst has a $115 price target on the stock, down from $116 previously. Fundraising was an area of weakness in the third quarter for the company, but Blackstone's assets under management still grew 6% year over year. Jon Gray, president and chief operating officer of Blackstone, told " Squawk Box " on Thursday that the investment firm has the capital to make deals. "With more than $200 billion of dry powder, that gives us a lot of flexibility to deploy in what looks to be a dislocated market," Gray said. — CNBC's Michael Bloom contributed reporting.