Goldman Sachs Removes Blackstone Group (BX) From Conviction Buy List

Goldman Sachs Group analysts Richard Ramsden, Brian Foran, Daniel Harris and Jessica Binder Graham removed The Blackstone Group (NYSE: BX) from their Conviction Buy List but maintained their Buy rating for shares of the company, with a price target of $16 per share.

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They said that while shares of The Blackstone Group had upside of 45% to the $16 price target, they were only within 10% of their floor trading price based on the company's fee-related earnings and balance sheet net cash/investments.

The Goldman Sachs Group analysts wrote, "we had expected investors to re-value BX shares based on the earnings optionality in its business model and for the stock to reflect the benefits of exposure to two key themes: (1) growth of institutional interest in alternative asset classes, and (2) pro-capital markets cyclicality. However, we underestimated the near-term sustainability of the improvement in the capital market cycle and asset values, and given widening credit spreads, we see near-term earnings headwinds. However, our conviction in the longer-term investment rationale for BX shares is intact and we now view the risk/reward as highly attractive (5-to-1 upside to downside), keeping us at Buy."