BlackRock Q2 EPS to Rise Over 18% to $9.28; Shares to Scale New Highs

The world’s largest asset manager BlackRock is expected to report its second-quarter earnings of $9.28 per share, which represents year-on-year growth of over 18% from $7.85 per share seen in the same quarter a year ago.

The New York-based multinational investment management corporation’s revenue would grow over 25% of $4.56 billion. In the last four consecutive quarters, on average, the investment manager has delivered an earnings surprise of over 11%.

The better-than-expected number would help the stock hit new all-time highs. The company will report its earnings result on Wednesday, July 14. BlackRock’s shares rose over 24% so far this year. The stock traded 2.38% higher at $397.42 on Friday.

“Shares of BlackRock have outperformed the industry over the past 12 months. The company has an impressive earnings surprise history. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters. With a strong liquidity position, strategic acquisitions and initiatives to restructure the equity business are likely to keep aiding revenues, and expand the company’s global reach and market share,” noted analysts at ZACKS Research.

“Steadily improving assets under management (AUM) balance are expected to continue to support revenue growth. Also, the capital deployments activities look sustainable and will enhance shareholder value. However, persistently increasing operating expenses (owing to higher administration costs) are expected to hurt the bottom line. Further, the company’s high dependence on overseas revenues makes us apprehensive.”

BlackRock Stock Price Forecast

Thirteen analysts who offered stock ratings for BlackRock in the last three months forecast the average price in 12 months of $949.62 with a high forecast of $1,017.00 and a low forecast of $850.00.

The average price target represents 5.76% from the last price of $897.93. All of those 13 analysts rated “Buy”, none rated “Hold” or “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $1,017 with a high of $1,456 under a bull scenario and $513 under the worst-case scenario. The firm gave an “Overweight” rating on the investment manager’s stock.

Several other analysts have also updated their stock outlook. UBS raised the target price to $984 from $890. JP Morgan lifted the target price to $959 from $905. Deutsche Bank upped the price target to $1,005 from $922. Evercore ISI raised the price target to $955 from $896.

Analyst Comments

“We believe BlackRock (BLK) is best positioned on the asset mgmt barbell given leading iShares ETF platform, multi-asset & alts combined with technology/Aladdin offerings that should drive ~13% EPS CAGR (2020-22e) via ~6% avg LT organic growth,” noted Michael Cyprys, equity analyst at Morgan Stanley.

“We see further growth ahead for Alts, iShares, international penetration, and the institutional market in the US. Recently acquired Aperio also bolsters solutions offering and organic growth. We expect the premium to widen as BLK takes share in evolving industry and executes on improving organic revenue growth trajectory.”

Check out FX Empire’s earnings calendar