NEW YORK (TheStreet) -- Shares of Blackstone Group (BX) - Get Report are up 1.58% to $31.15 in afternoon trading on Wednesday as the company engages in talks to sell four of its Los Angeles office towers, according to the Wall Street Journal.
Blackstone is speaking with Douglas Emmett Inc. (DEI), a real-estate investment trust that went public in 2006, about the sale.
If completed, the deal would be one of the largest office sales in Los Angeles in recent history, according to the Journal.
The four towers being sold feature a combined 1.7 million square feet in the Westwood section of Los Angeles.
Douglas Emmet shares are flat in trading today.
TheStreet Ratings team rates BLACKSTONE GROUP LP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate BLACKSTONE GROUP LP (BX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BX, with its very weak revenue results, has greatly underperformed against the industry average of 5.7%. Since the same quarter one year prior, revenues plummeted by 99.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Capital Markets industry and the overall market, BLACKSTONE GROUP LP's return on equity exceeds that of both the industry average and the S&P 500.
- BLACKSTONE GROUP LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BLACKSTONE GROUP LP increased its bottom line by earning $2.59 versus $1.98 in the prior year. For the next year, the market is expecting a contraction of 10.4% in earnings ($2.32 versus $2.59).
- After a year of stock price fluctuations, the net result is that BX's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Despite the stock's decline during the last year, it is still somewhat more expensive (in proportion to its earnings over the last year) than most other stocks in its industry. We feel, however, that other strengths this company displays offset this slight negative.
- You can view the full analysis from the report here: BX
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.