Blackstone’s $136 billion uninvested ‘dry powder’ boosts its appeal

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These reports, excerpted and edited by Barron’s, were recently published by investment and research firms. The reports are a sample of the analysts’ thinking; they should not be considered Barron’s opinions or recommendations. Some of the issuers of the reports have provided, or expect to provide, investment banking or other services to the companies analyzed.

Blackstone BX-NYSE

Buy (4 out of 5 stars) Price $128.78 on February 25

by CFRA

We view Blackstone’s secular growth opportunities positively, as evidenced by asset inflows of $270.5 billion in 2021. ‘private equity investment will be fueled by the still relatively low interest rate environment. While a more muted market may make year-to-year comparisons of asset accomplishments difficult, it also presents an opportunity to deploy the company’s nearly $136 billion of unallocated “dry powder.” . Our target price of $155 is based on a forward P/E of 29.5 times our estimate of 2022 distributable EPS and 25.4 times our estimate of 2023 EPS, relative to the average one-year forward multiple of 26 .8 times and a peer average of 15.4 times, backed by BX. greater scale, a more diversified mix of assets under management and organic growth in assets under management. This growth reached 38% in 2021 and regularly exceeds peer averages. We estimate distributable EPS of $5.25 in 2022, rising to $6.10 in 2023. BX reported distributable EPS of $4.77 in 2021 and $2.65 in 2020.


Pension financial services

PFS-NYSE

Overweight Price $23.70 March 2

by


Piper Sandler

On Wednesday, we held Zoom calls with investors and the new CEO of


Foresight

Financial, Tony Labozzetta, as well as Chief Financial Officer Tom Lyons. We found the calls helpful in better understanding the subtle shifts in strategy the new CEO is considering. For perhaps a decade or more, Provident was universally regarded as a conservative, well-run commercial bank. If there was a twist on the story, it was that the company was sometimes a bit too conservative. We nicknamed it the “Turtle Bank”, because of its slow and steady approach. The new CEO is likely to step down on the accelerator a bit more. We have known him for some time and consider him an outstanding leader. He had done an outstanding job in developing, diversifying and driving the profitability of SB One Bancorp, acquired by Provident in 2020. While he stressed that the bank’s risk culture will remain intact, if not strengthened, he believes he can intensify its growth in several areas. We believe this has the potential to increase profitability over the coming quarters, to the benefit of equities. Stock price target: $27.

ChargePoint Holdings CHPT-NYSE

Surpass Price $14.07 on March 2

by


Oppenheimer

With ChargePoint posting better-than-expected revenue growth and guidance, we believe the roughly 6% margin headwinds due to supply chain inefficiencies will be largely forgiven by investors. Given the early stage of the [electric-vehicle charging] market, we believe that CHPT’s ability to maintain/increase its market share is critical to the long-term model of generating recurring revenue through [charging] Harbor. The company is performing well on port growth and gaining ground in the European Union, aided by recent acquisitions. The company is pursuing a strong strategy, bringing several new products to market in fiscal 2023. We expect it to benefit from additional operating leverage in the future, and it could significantly exceed our earnings estimates through FY26. Our 12-18 month price target is $40.


Vertiv Holdings

VRT-NYSE

underperform Price $12.25 on February 23

by BofA Securities

We view Vertiv, an electrical products manufacturer focused on the data center (70% of revenue) and telecommunications (20%) markets, as facing short-term supply chain and costs that will limit margin expansion. The company is also increasing R&D and other growth investments. Although it has a strong order book, volume growth will depend on easing supply chain constraints. We are lowering our Buy rating, given 4Q21 results and guidance for 2022. We are lowering our share price target by $17, to $15, based on 12x estimated Adjusted EBITDA for 2023 ( earnings before interest, taxes, depreciation and amortization) compared to 14 times previously.


Hyatt Hotels

H-NYSE

Overweight Price $95.58 on March 2

by


JP Morgan

We recently held investor meetings with [some top managers of] Hyatt Hotels. We came away confident in our positive investment thesis and, despite the noise surrounding geopolitical risks and supply chains, we believe Hyatt is well positioned to benefit from leisure trends and a recovery in business travel. /group activity. Price target: $111.


Pembina pipeline

PPL-Toronto

Surpass Price CA$44.08 on March 1

by BMO Research

We are modernizing Pembina [which also trades on the NYSE, under the symbol PBA] of Market Perform, with a share price target of CA$50, down from CA$43, and a Top 3 Best Idea designation, following the formation of its Newco joint venture with


KKR

[ticker: KKR], [which merges their western Canadian natural gas-processing assets]. We view the JV positively for cash flow; capital returns; environmental, social and corporate governance objectives; and the company’s risk profile.

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