Thursday Market Close Recap: Blackstone Shines, Elevance Stumbles

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•  17 Oct 2024
 

As the markets closed today, investor sentiment was mixed, with notable movements in the financial and healthcare sectors. The spotlight was on Blackstone $BX, which surged 6.30% after delivering robust Q3 earnings and exceeding expectations, while Elevance Health $ELV slumped over 10% following disappointing results and a downgraded outlook.

Blackstone $BX was the clear winner of the day, as its Q3 earnings report painted a compelling picture for investors. The alternative asset management giant reported quarterly earnings of $1.01 per share, comfortably beating the consensus estimate of $0.91. Revenues also came in strong at $2.43 billion, slightly above the expected $2.41 billion. Perhaps the most significant figure was the company’s record $1.11 trillion in assets under management (AUM), a testament to the continued strength in private equity and real estate markets. With $40.5 billion in inflows, Blackstone is clearly benefiting from a robust fundraising environment, and the 5% dividend increase only adds to its appeal. Investors looking for exposure to alternative assets may find Blackstone’s continued growth trajectory and income potential compelling, especially as it prepares to exit some investments via IPOs. The stock is now up over 30% year-to-date.

On the flip side, Elevance Health $ELV faced a challenging day, dropping 10.59% after missing Q3 earnings estimates and cutting its full-year outlook. The healthcare insurer posted earnings of $8.37 per share, far below the consensus estimate of $9.70. Revenue came in at $44.72 billion, a modest beat, but rising medical costs and Medicaid redeterminations weighed heavily on profitability. This marks a continuation of the headwinds facing the healthcare sector, particularly around cost management and regulatory uncertainty. For investors, the sharp decline in Elevance’s stock price could present a buying opportunity, especially given its strong revenue growth. However, the near-term outlook remains clouded by higher medical expenses, and it might be prudent to wait for clarity on how the company manages these pressures.

Expedia $EXPE also saw a significant move, rising 4.75% on reports that Uber $UBER is considering a potential takeover. While some analysts are skeptical about the synergies of such a deal, the market reacted positively to the speculation. For both companies, this potential merger could reshape the travel and mobility industries, offering expanded service offerings and operational efficiencies. Investors in Expedia should watch for further developments, as any concrete news could further propel the stock upward.

Huntington Bancshares $HBAN reported solid Q3 earnings but fell 2.59% as it issued cautious guidance for Q4. The bank reported earnings of $0.33 per share, beating estimates by $0.03. However, the flat revenue growth and concerns over net interest income weighed on investor sentiment. Regional banks like Huntington are facing a tougher environment with rising interest rates and slower loan growth. Investors may need to be selective in the financial sector, focusing on banks with better loan growth prospects and diversified income streams.

Infosys $INFY also saw a modest decline of 1.03% after reporting in-line earnings but trimming its revenue guidance for FY25. The company’s Q2 results reflected strong performance in its core IT services business, with revenue growing by 3.7% year-over-year. However, concerns about slowing global demand for IT services and macroeconomic uncertainty have kept a lid on the stock. For long-term investors, Infosys remains one of the more stable plays in the IT outsourcing space, but near-term volatility is likely as the global economy continues to navigate a slowdown.

In summary, today’s market action highlighted the divergence between sectors. Blackstone’s strong performance reflects the strength in alternative assets and private markets, while Elevance Health’s struggles underscore the challenges in the healthcare sector. Investors should remain cautious but opportunistic, seeking value in sectors that demonstrate strong fundamentals and growth potential. As always, it’s important to consider these developments within the broader macroeconomic context, keeping an eye on interest rate trends, inflation data, and sector-specific risks.