Blackstone (BX) is back in focus after Kuwait Oil Company agreed to a US$16.0b lease and leaseback joint venture covering Kuwait’s entire domestic and export oil pipeline network over a 20.5 year period.

The Kuwait pipeline joint venture headlines a busy period for Blackstone, with the stock trading at US$133.90 and showing a 16.03% 1 month share price return, while year to date the share price return is down 15.68%. This follows Q2 earnings and dividend announcements, continued share buybacks, and fresh AI linked initiatives. The 3 year total shareholder return of 37.45% contrasts with a 1 year total shareholder return that has declined 21.62%, suggesting momentum has recently picked up after a weaker stretch.

If this kind of large scale infrastructure and energy exposure interests you, it can be worth scanning for other potential ideas across the market using the 34 power grid technology and infrastructure stocks

Bulls see Blackstone’s Kuwait pipeline deal, earnings beat and AI push as proof that the current valuation premium is justified. Bears point to the recent share price drawdown. Which side does the data support as valuation comes into focus?

Most Popular Narrative: 6.7% Undervalued

Blackstone’s most followed valuation narrative pegs fair value at $143.45, slightly above the last close at $133.90. This puts the current debate squarely on whether future earnings can justify that gap.

The firm is well-positioned to benefit from market dislocation with $177 billion of dry powder available for opportunistic investments, potentially increasing future earnings as capital is deployed in undervalued assets. Blackstone's strategic alliance with Wellington and Vanguard aims to develop integrated public-private investment solutions, potentially expanding revenue channels by tapping into the private wealth market.

Want to understand why this narrative sees more upside for Blackstone from here? The core thesis leans heavily on faster revenue growth, expanding margins and a lower future earnings multiple than many peers. The full story is in how those three levers interact across real estate, private equity and credit.

Result: Fair Value of $143.45 (UNDERVALUED)

However, this Blackstone narrative could still be challenged if tariffs push up construction costs for real estate or if market volatility keeps deal activity and realizations subdued.

Another View: Cash Flow Signals a Richer Blackstone Valuation

While the popular Blackstone narrative points to a fair value of $143.45 and labels the stock as 6.7% undervalued, the SWS DCF model comes to a different conclusion. On that cash flow view, Blackstone at $133.90 trades above an estimated value of $112.80, which flags less room for error. Which lens do you trust more when earnings expectations change?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Blackstone for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 49 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With both risks and rewards in play for Blackstone, it makes sense to check the underlying data now and decide where you stand. To see how the trade off looks in detail, review the 2 key rewards and 3 important warning signs

Looking for more Blackstone style investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.