BlackRock (NYSE:BLK) It is scheduled to report its fiscal Q4 2021 results on Friday, January 14, 2022. We expect BlackRock to exceed consensus estimates for revenue and earnings. The asset management behemoth exceeded estimates last quarter, posting 16% year-on-year growth in its top-line. Revenue growth was primarily driven by higher base fees and an increase in delivery charges. In addition, it reported total long-term fund inflows of $98 billion in Q3. We expect the same trend to continue in our fourth quarter results.
we guess BlackRock’s Valuation About $974 per share which is 10% higher than the current market price. This represents a P/EBITDA multiplier of 196 based on our forecast for the company BlackRock’s EBITDA for the current financial year. Our interactive dashboard analysis BlackRock earnings preview There is more detail.
(1) Revenue is expected to be slightly ahead of consensus estimates
BlackRock’s Revenue For the full year 2020, it grew 11% year over year to $16.2 billion. This was partly due to asset growth and partly due to unfavorable conditions in other industries that diverted funds towards BlackRock.
- The company had a strong run in 2020 driven by growth in Assets Under Management (AUM), which benefited from higher asset valuations and net fund inflows of approximately $391 billion. Notably, the total AUM grew by 17% year-on-year to $8.68 trillion at the end of December 2020. This resulted in a 7% increase in total investment advisory, administration fees, and securities lending revenue (base fees) to $12.6 billion. Moreover, the same trend continued in the first three quarters of 2021, leading to a 22% increase in the base fee to $11.3 billion. Similarly, AUM grew by 9% to $9.47 trillion between December 2020 and September 2021. We expect fourth quarter results to see similar momentum.
- BlackRock Technology Services revenue grew 17% annually to $1.1 billion in 2020, primarily reflecting higher revenue from Aladdin. In addition, the segment grew 13% annually to $942 million in the first nine months of 2021. This was partly due to organic growth and partly due to the acquisition of Aperio. We expect this trend to continue in the fourth quarter as well.
- Overall, we expect BlackRock’s revenue to be approximately $19.4 billion for fiscal 2021.
Trefis estimates BlackRock’s fiscal 2021 fourth quarter revenue to be about $5.17 billion, slightly higher than the consensus estimate of $5.13 billion. We expect asset growth to drive fourth quarter results.
Going forward, we expect BlackRock’s AUM and technology revenue to maintain its growth trajectory in subsequent quarters. Our Dashboard is on BlackRock’s Revenue Provides more details on the company’s operating segments along with our forecast for the next two years.
2) EPS likely to top consensus estimates
BlackRock Q4 2021 adjusted earnings per share is expected to be $10.37 per Trefis analysis, which is approximately 3% higher than the consensus estimate of $10.07. Higher revenue in 2020 translated to a 10% increase in adjusted net income to $4.9 billion. In addition, adjusted net income increased 26% annually to $4.3 billion in the first three quarters of 2021, due to revenue growth and lower expenses as a % of revenue. We expect a similar trend to drive fourth quarter results.
Overall, BlackRock is expected to report adjusted net income of $5.9 billion and annual EPS of $38.32 for the full year 2021.
(3) The stock price is estimated to be 10% higher than the current market price
we get here BlackRock’s Valuation, using an EPS estimate of approximately $38.32 in fiscal year 2021 and a P/E multiplier of just above 25x. This translates into a price of $974, which is about 10% higher than the current market price of $888.
Note: P/E multipliers are based on year-end share price and reported (or expected) adjusted earnings for the full year
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