On Monday, CFRA maintained its Buy rating on shares of BlackRock, Inc. (NYSE:BLK), while raising the stock's price target from $905.00 to $935.00.
The revision follows BlackRock's second-quarter earnings report, which revealed earnings per share (EPS) of $10.36, exceeding both CFRA's estimate of $10.30 and the consensus estimate of $9.96. The firm's revenue growth of 8% matched CFRA's projected range of 8%-11%, and the adjusted operating margin improved to 44.1% from the previous year's 42.5%.
The updated 12-month price target is based on a valuation of 17.6 times CFRA's newly initiated 2026 adjusted EPS estimate of $53.10, and 19.7 times their 2025 EPS estimate of $47.50, which was increased by $1.00. These multiples compare to BlackRock's three-year average forward multiple of 20 times and a peer average of 15 times. Moreover, CFRA has slightly increased its 2024 EPS estimate for BlackRock by $0.06 to $43.26.
BlackRock's performance in the second quarter was bolstered by net inflows of $82 billion, compared to $80 billion in the same quarter of the previous year. These inflows included $83 billion from ETFs, offset by some merger-related institutional outflows. The total year-to-date inflows now stand at $139 billion.
The firm's growth and future prospects are attributed to several factors. CFRA expects BlackRock to continue experiencing above-peer organic growth and highlights the company's attractive mandate pipeline. The report also notes the contributions from Aladdin, BlackRock's investment management platform, which saw a 10% increase in revenues during the second quarter.
Moreover, selective bolt-on acquisitions aimed at expanding BlackRock's presence in the alternatives space are anticipated to support the premium valuation of the shares compared to peers.
BlackRock's stock currently offers a dividend yield of 2.5%, which adds to the attractiveness of the investment according to CFRA's analysis.
In other recent news, BlackRock Inc (NYSE:BLK). has reported a record high of $10.65 trillion in assets under management (AUM) for the second quarter, largely driven by increased investor interest in exchange-traded funds (ETFs). The firm also reported total net inflows of $81.57 billion during the quarter. In terms of revenue, BlackRock's total revenue rose 8% to $4.81 billion, with net income reported at $1.50 billion.
In a strategic move, BlackRock finalized an agreement to acquire data provider Preqin for nearly $3.2 billion. Analysts from UBS reaffirmed a neutral stance on the acquisition, predicting a slight dilutive effect on BlackRock's earnings per share in 2025. However, Citi maintained its buy rating on BlackRock, indicating a positive outlook for the firm's future performance.
BlackRock is also planning to enter the private markets space with indexes and exchange-traded funds (ETFs) following the acquisition of Preqin. This acquisition is expected to enhance BlackRock's capabilities by leveraging Preqin's data to create investable indices and exchange-traded products. These recent developments reflect BlackRock's active role in both the private markets and global financial negotiations.
InvestingPro Insights
BlackRock, Inc. (NYSE:BLK) continues to affirm its position as a robust investment choice, as reflected in recent data and analysis. According to InvestingPro metrics, BlackRock boasts a market capitalization of $121.79B, and its P/E ratio stands at 20.7, suggesting a reasonable valuation compared to near-term earnings growth. Moreover, the company's revenue has seen a healthy growth of 5.32% over the last twelve months as of Q1 2024, underpinning its solid financial performance.
Investors may find comfort in BlackRock's consistent dividend track record, with the company having raised its dividend for 14 consecutive years and maintained dividend payments for 22 consecutive years. These InvestingPro Tips highlight the firm's commitment to shareholder returns. Furthermore, BlackRock's liquidity position is robust, with liquid assets surpassing short-term obligations, which may reassure investors of the company's financial health.
For those looking to delve deeper into BlackRock's investment potential, InvestingPro offers additional insights. There are 8 analysts who have revised their earnings upwards for the upcoming period, a testament to the company's promising outlook. BlackRock is trading at a price that is near its 52-week high, reflecting investor confidence in the stock. To access more exclusive tips and metrics, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, with 5 additional tips available to guide your investment decisions.
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