BlackRock Stock Has Limited Upside

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[Updated 11/26/2021] BlackRock Valuation Update

BlackRock Stock (NYSE:BLK) has gained a 30% YTD, and at its current price of $935 per share, that’s about 4% less than its fair value of $974 – Trefis estimates BlackRock’s Valuation, The asset management giant recently released its third-quarter results, which outperformed consensus estimates for revenue and earnings. It reported total revenue of $5.05 billion in the quarter — 16% yoy. The improvement can be attributed to 22% increase in base fee coupled with a significant jump in delivery charges. In addition, the company reported $98 billion in long-term net inflows for the quarter. Notably, total assets under management (AUM) stood at $9.47 trillion at the end of September, up 9% from the December 2020 figure. Adjusted net income increased 23% year over year to $1.7 billion, partially offset by a modest increase in operating expenses as a % of revenue.

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The company reported an 11% increase in full-year 2020 revenue to $16.2 billion. This was driven by an increase in AUM, which benefited from higher asset valuations and net fund inflows of nearly $400 billion. The same trend continued in the first three quarters of 2021, with total nine-month revenue growing 22% year over year to $14.3 billion. Growth was primarily driven by a 38% increase in securities lending revenue from total investment advisory, administration fees, and equity investments. Notably, the above revenue stream contributes about 40% to the top-line. In addition, technology services revenue, which grew 17% annually to $1.1 billion in 2020, grew 13% annually in the first nine months. It benefited from the acquisition of Aperio and higher revenue from Aladdin. Overall, we expect the trend to continue in the fourth quarter. BlackRock’s Revenue To touch $19.3 billion in FY2021. Additionally, the company’s adjusted net income margin is likely to see slight improvement over the year, resulting in adjusted net income touching $6 billion. This would raise the EPS figure to $38.97, which combined with a P/E multiplier of 25 times, would result in a valuation of $974.

[Updated 08/18/2021] With $9.5 Trillion in Assets, Is BlackRock Stock Worth $910?

BlackRock Stock (NYSE:BLK) has gained a 26% YTD, and at its current price of $910 per share, that’s 6% below its fair value of $967 — Trefis estimates for BlackRock’s Valuation, The world’s largest asset manager has outperformed expectations in the recently released Q2 2021 results. Its top-line jumped 32% to $4.8 billion in the quarter, driven primarily by a significant jump in performance-based revenue following a 27% increase in base fees. In addition, the company’s assets under management (AUM) touched $9.5 trillion in the second quarter – 30% more than the year-ago period, combined with net inflows of $81 billion. This translated into a 14% year-over-year increase in adjusted net income, taking it to $1.4 billion. The increase in profitability numbers was not commensurate with revenue due to higher income tax expenditures, as a result of legislation in the UK increasing its corporate tax rate.

Despite the COVID-19 crisis, the company reported total revenue of $16.2 billion in 2020 – 11% annually, driven primarily by growth in AUM and technology services revenue. Moreover, the same trend continued in the first and second quarters of 2021 as well. The company’s total AUM at the end of the second quarter was approximately $9.5 trillion – up 9% from December 2020 levels. This was primarily driven by a 14% growth in the equity product category with total long-term AUM of approximately $5 trillion. Going forward, we expect the asset base and technology services to grow further in the subsequent quarters, thereby BlackRock’s Revenue To touch $18.9 billion in FY2021. Additionally, BLK’s adjusted net income margin is expected to remain around the same level as last year. However, driven by growth in revenue, net income is expected to increase approximately 18% year over year to $5.8 billion. This could result in an EPS of $37.68, which, combined with a P/E multiplier of below 26x, would lead to a valuation of $967.

[Updated 03/26/2021] BlackRock stock is trading 10% below its fair value

BlackRock Stock (NYSE:BLK) has risen more than 120% from last year’s March 23 lows and at its current price of $728 per share, that’s nearly 10% below its fair value of $830 — Trefis estimates for BlackRock’s Valuation, BLK, the world’s largest asset manager, has seen a meteoric rise in its stock price since March 2020, partly due to earnings expectations in each of the past four quarters and partly because of COVID-19 in other industries. Powered by Headwind. global pandemic. The company reported net fund inflows of about $391 billion in the year, taking its total assets under management (AUM) to $8.68 trillion at the end of December 2020 – a 17% year-on-year increase. This led to an 11% increase in full-year 2020 revenue to $16.2 billion.

Exchange-traded fund issuers such as BlackRock, Vanguard, and Charles Schwab, etc., are in the midst of an aggressive price war to maximize their market share and stand out from the competition. In a recent development, BlackRock has announced that it will reduce fees in a suite of nine American equity-style investment ETFs with cumulative assets of $7.6 billion. This is likely to make BlackRock’s offerings more competitive, attract more fund inflows, and offset the loss of fee revenue. Further, with the expected mass availability of the COVID-19 vaccine and the potential recovery in the economy, we expect BlackRock’s Revenue To touch $18 billion by FY2021 – a year-on-year growth of 11%. Net income margin is likely to be around the same level as the 2020 figure, leading to EPS of $35.78 for FY21. This, combined with a P/E multiplier of approximately 23x, would lead to a valuation of $830.

[Updated 11/13/2020] BlackRock stock is close to its fair value

Having gained more than 100% from the March bottom, BlackRock Stock (NYSE:BLK) is nearing its potential in the near future. traffic estimate BlackRock’s Valuation About $707 per share – about 5% more than the current market price. Despite the COVID-19 crisis, BlackRock, the world’s largest asset manager, has seen its revenue increase on a year-on-year basis in each of the last three quarters. This can be attributed to the recovery rally in global financial markets which improved asset values ​​and attracted more investor funds. In Q3 2020, BlackRock beat earnings with total revenue of $4.37 billion, up 18% annually. In addition, the company reported net inflows of $129 billion for the quarter.

we expect BlackRock’s Revenue To improve further in the coming months, primarily driven by higher asset valuations. It is likely to report $15.4 billion in revenue for fiscal 2020 — up 6% from the year-ago figure. In addition, its net income is expected to grow by 4%, taking the EPS figure for FY20 to $30.82. Thereafter, revenue is expected to reach $16.6 billion in FY21, primarily driven by growth in equity, fixed income and alternative investment segments. , In addition, the EPS figure is likely to improve to $33.95, which, combined with a P/E multiplier of just below 21x, would result in a valuation of around $707.

[Updated 07/30/2020] BlackRock stock has climbed 76% in recent months, could it rise further?

BlackRock Stock (NYSE:BLK) lost more than 34% — falling from $499 at the end of 2019 to about $327 at the end of March — then rose 76% to about $570. This means it is up 14% from the beginning of the year.

There were two obvious reasons for this: the outbreak of COVID-19 and the economic slowdown meant that market expectations for 2020 fell and asset valuations in securities markets fell. This could negatively impact BlackRock’s revenue because it drives most of its revenue from investment advisory, administration fees and securities lending revenue, which is charged as a percentage of assets under management (AUM). The multi-billion dollar Fed stimulus provided a floor, and much of the stock’s recovery is owed.

But that’s not the end of the story for BlackRock stock

traffic estimate BlackRock’s Valuation Based on upcoming triggers and one of the risk factors described below – approximately $620 per share – should be approximately 10% higher than the current market price.

Has a better trajectory for the trigger BlackRock’s Revenue in the second half of the year. We expect the company to report $15.1 billion in revenue for 2020 — about 4% more than the 2019 figure. Our forecast stems from our belief that the economy is likely to open up in Q3. In addition, a rally in the securities market after a multi-billion dollar stimulus at the end of March has improved asset valuations. This is beneficial to BlackRock because it charges its fee revenue as a percentage of assets under management (AUM), which is a significant part of its top line. The company has also benefited from positive net inflows — about $100 billion in the second quarter of the year, and the momentum is expected to continue in the coming months. Additionally, easing of lockdown restrictions in most parts of the world is likely to support consumer demand, benefiting the overall business landscape. Overall, we see that the company is reporting EPS of approximately $29.30 for fiscal 2020 — slightly higher than the year-ago period.

Thereafter, BlackRock’s revenue is expected to grow…

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