Blackstone (BX) Could Be 10% Below Fair Value Following Nucleus Network Sale Talks
Blackstone (BX) has drawn fresh attention after reports that it is seeking to sell its Australian clinical trials operator Nucleus Network, in a potential billion dollar deal that has attracted interest from EQT and Bain Capital.
These potential sales of Nucleus Network and ZO Skin Health, together with the planned AirTrunk refinancing and the agreement to buy Flow Control Holdings, come as Blackstone’s 1 month share price return is down 12.23% and its year to date share price return is down 19.07%. The 1 year total shareholder return has declined 26.26% but remains positive at 24.23% over three years and 14.53% over five years, highlighting the contrast between recent performance and longer term results.
Scan how Blackstone’s latest moves compare with other alternative asset managers by reviewing hand picked 16 high quality undiscovered gems in the same corner of the market.Bears see Blackstone’s recent share price slide as a warning that asset sales are about patching weakness. Bulls point to portfolio pruning, fresh fee streams and resilient earnings. Which side do the current valuation markers support?
Most Popular Narrative: 10.4% Undervalued
Blackstone’s most followed narrative pegs fair value at $143.45, above the recent $128.51 close, which puts the current share slide in a different light.
The firm is well-positioned to benefit from market dislocation with $177 billion of dry powder available for opportunistic investments, potentially increasing future earnings as capital is deployed in undervalued assets. The expansion in private credit, particularly in investment-grade private credit, shows a 35% year-over-year growth, indicating potential for significant revenue streams due to larger spreads and structural tailwinds in the credit markets.
Curious what has to happen for that valuation to hold. The narrative leans on rapid earnings expansion, rising margins and a future P/E reset that is far below sector norms.
Result: Fair Value of $143.45 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
Still, tariffs that lift construction costs and any prolonged slowdown that hits portfolio valuations or realizations could quickly undermine the bullish Blackstone narrative.
Find out about the key risks to this Blackstone narrative.
Another View: What The DCF Model Says About Blackstone
The crowd narrative has Blackstone at roughly 10.4% undervalued, yet the Simply Wall St DCF model tells a different story. On that cash flow view, BX at $128.51 sits above an estimated future cash flow value of $113.84, which points to a stock that screens as overvalued instead. Which set of assumptions do you trust more: the optimistic earnings profile or the more guarded cash flow path?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Blackstone for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 31 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Mixed messages on Blackstone so far. With both concerns and potential upsides in play, consider acting promptly and weigh both sides for yourself with 2 key rewards and 3 important warning signs.
Looking for more Blackstone sized opportunities?
If Blackstone has you rethinking where you deploy capital next, do not just stop here. Use fresh screeners to uncover ideas you would otherwise miss.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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