On Monday, Blackstone Inc. (NYSE:BX) shares declined by about 2% after agreeing to sell the Metropolitan casino and hotel business in a deal with $5.65 billion. MGM Resorts International (NYSE:MGM) is buying the hotel and casino business for $1.6 billion, while Blackstone real estate investment trust will acquire the real estate property for $4 billion.
According to Blackstone’s letter reviewed by the Wall Street Journal, the private equity firm will net $4.1 billion in profit and cash flows from the casino and hotel operations. The company bought the property for $1.8 billion seven years ago and spent an additional $500000 in upgrades and renovations.
Is Blackstone a good stock to buy in Q4 2021?
From a valuation perspective, Blackstone shares trade at a relatively steep forward P/E ratio of 28.43 compared to the trailing P/E of 19.31. Therefore, the stock may not be appealing to value investors.
Moreover, analysts expect its earnings per share to plunge by more than 50% this year before rising at an average annual rate of about 16.16% over the next five years. As a result, long-term growth investors could find Blackstone shares as an exciting opportunity.
Source – TradingView
Is Blackstone pullback an opportunity to buy?
Technically, Blackstone shares appear to have recently pulled back after hitting new historical highs. The stock recently rallied to trade at about $136.88 before pulling back to $122.24.
However, with shares yet to hit the oversold conditions of the 14-day RSI, the pullback could continue to the foreseeable future. Therefore, investors can target extended short-term pullbacks at $116.71 or lower at $109.44. On the other hand, $128.93 and $135.47 are critical resistance zones.
Bottom line: It is not too late to short BX shares
In summary, although Blackstone looks like an exciting long-term growth stock, investors could still capitalize on short-term turbulence by shorting the stock on the downward movement.
Moreover, with shares yet to reach the oversold conditions of the 14-day RSI, there is more room to run before retesting the key support levels.
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