Key Stats for Blackstone Stock
- Price Change for Blackstone stock: -5.6%
- $BX Share Price as of Jan. 7: $154
- 52-Week High: $190
- $BX Share Price Target: $181
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What Happened?
Blackstone (BX) stock dropped sharply on Wednesday after President Trump announced plans to ban large institutional investors from purchasing single-family homes in the United States.
In a Truth Social post, Trump called on Congress to pass legislation prohibiting the practice, stating that “people live in homes, not corporations.”
The president argued that homeownership, long considered a cornerstone of the American Dream, has become increasingly unaffordable for younger Americans.
Blackstone, which manages over $1.2 trillion in assets, has built one of the country’s largest rental housing portfolios over the past several years. The firm owns hundreds of thousands of single-family homes and apartments across various markets.
Critics have accused Blackstone of buying up homes at scale in an already tight housing market, reducing supply and driving prices higher.
However, the company pushed back on these claims. Blackstone told CNBC that it owns less than 1% of the available housing in each market where it operates and has been a net seller of homes over the past decade, with holdings down by more than 20%.
The company also noted that its U.S. single-family home investments represent only about 2% of its real estate assets and just 0.5% of its overall firm.
Trump said he would discuss housing affordability proposals in more detail at the upcoming Davos conference later this month.
Additionally, the president issued an executive order targeting defense contractors, prohibiting them from paying dividends or buying back stock until they can deliver superior products on time and on budget.
Despite the recent pullback, BX stock offers significant upside potential, according to our valuation model. Given a forward earnings multiple of 25x, BX stock could return more than 21% annually over the next two years.
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What the Market Is Telling Us About BX Stock
The sharp decline in Blackstone’s stock suggests investors are worried about the potential impact of new regulations on the firm’s housing portfolio, even though single-family homes account for only a small portion of its business.
Housing economists generally agree that banning institutional investors would likely do little to improve affordability on a national scale. The real problem is a shortage of homes.
According to a Yahoo Finance report, large investors with at least 1,000 units owned just 0.73% of all single-family homes nationwide as of October 2023.
While that share is higher in certain markets, particularly in the Southeast, institutional ownership remains a small fraction of the overall housing stock.
Still, the market’s negative reaction to Trump’s announcement shows that investors are taking the threat seriously.
Whether this becomes actual policy or remains political rhetoric will be crucial for Blackstone stock and other firms with similar housing investments going forward.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
