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BlackRock (BLK)
NYSE:BLK
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BlackRock
(NYSE:BLK)
76Outperform
Positive Factors
Financial Performance
Strong earnings beat expectations with better revenues, operating income, and margins, reinforcing confidence in the investment thesis.
Growth Potential
Analysts expect BlackRock to outperform amidst client re-risking and gradually unleash the synergy from its recent acquisitions of private market businesses.
Market Position
BlackRock is the largest asset manager by both AUM and revenue, with total solution capability thanks to its global reach, expertise across asset classes, and proprietary technology platform.
Negative Factors
Earnings Impact
A 1bp cut for BLK's ETF AUM could lead to a 3% reduction in 2025 EPS.
Fee Pressure
Vanguard's repricing action is negative for the asset management industry.
Stock Price Concerns
BLK's stock price is experiencing a double hit from tariff concerns and Vanguard's fee rate cuts.
BlackRock (BLK) vs. S&P 500 (SPY)
Market Cap
$127.71B
Dividend Yield2.49%
Average Volume (3M)1.00M
Price to Earnings (P/E)19.6
Beta (1Y)1.26
Revenue Growth12.15%
EPS Growth15.17%
CountryUS
Employees21,100
SectorFinancial
Sector Strength78
IndustryAsset Management
Share Statistics
EPS (TTM)42.01
Shares Outstanding155,253,450
10 Day Avg. Volume779,522
30 Day Avg. Volume1,002,851
Financial Highlights & Ratios
PEG Ratio1.29
Price to Book (P/B)N/A
Price to Sales (P/S)7.24
Price to Cash Flow (P/CF)14.10
P/FCF Ratio14.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1,171.07Price Target Upside42.36% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering15
BlackRock Business Overview & Revenue Model
Company DescriptionBlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston, Massachusetts; London, United Kingdom; Gurgaon, India; Hong Kong; Greenwich, Connecticut; Princeton, New Jersey; Edinburgh, United Kingdom; Sydney, Australia; Taipei, Taiwan; Singapore; Sao Paulo, Brazil; Philadelphia, Pennsylvania; Washington, District of Columbia; Toronto, Canada; Wilmington, Delaware; and San Francisco, California.
How the Company Makes MoneyBlackRock makes money primarily through fees associated with managing assets for its clients. The company's revenue streams are largely derived from investment advisory and administration fees, which are calculated based on a percentage of assets under management (AUM). BlackRock also earns performance fees, which are based on the investment performance of certain funds relative to specified benchmarks. The firm benefits from its extensive range of iShares ETFs, a significant contributor to its revenue. Additionally, BlackRock generates income from technology services, notably through its Aladdin platform, which provides risk management and investment operations solutions. Strategic partnerships and joint ventures also play a role in enhancing its revenue, as does its global presence, allowing it to tap into various international markets.
BlackRock Financial Statement Overview
Summary
BlackRock exhibits strong growth and profitability with sound financial management reflected in its income statement and balance sheet. The company's efforts in reducing leverage and increasing equity utilization are commendable. However, incomplete cash flow reporting hinders a full assessment of liquidity and cash generation. Continued focus on operational efficiency and comprehensive financial disclosures could further strengthen BlackRock's financial standing.Income Statement
BlackRock has shown consistent revenue growth with a notable increase from $17.86 billion in 2022 to $20.41 billion in 2024, indicating strong demand for its services. The gross profit margin has remained robust, with a slight increase from 46.8% in 2023 to 49.4% in 2024, reflecting effective cost management. Net profit margin also improved from 30.8% in 2023 to 31.2% in 2024, showcasing enhanced profitability. Overall, the company's income statement reflects strong growth and profitability metrics, although slight fluctuations in EBIT margin from 35.1% (2023) to 37.1% (2024) suggest room for operational efficiency improvements.85
Very Positive
Balance Sheet
The balance sheet depicts a healthy financial position with no reported total debt in 2024, suggesting prudent financial management. The debt-to-equity ratio has improved significantly from 0.25 in 2023, reflecting reduced leverage. Return on equity stands at a solid 14.6% in 2024, indicating effective use of equity to generate profits. However, the absence of total assets reporting in 2024 prevents a comprehensive equity ratio analysis. Overall, BlackRock's balance sheet indicates strong equity support and reduced debt levels, although transparency on asset reporting could enhance clarity.77
Positive
Cash Flow
Cash flow analysis reveals challenges, with operating cash flow and free cash flow not reported for 2024, limiting insights into cash generation capabilities. Historically, free cash flow showed positive growth, affirming underlying business strength. In 2023, operating cash flow to net income ratio was 0.75, highlighting efficient cash conversion. The lack of current data on cash flows emphasizes the need for improved reporting to assess liquidity and cash management comprehensively.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 20.41B | 17.86B | 17.87B | 19.37B | 16.20B | Gross Profit |
| 10.09B | 8.35B | 8.79B | 9.82B | 8.27B | EBIT |
| 7.57B | 6.28B | 6.38B | 7.45B | 5.70B | EBITDA |
| 8.12B | 7.87B | 6.90B | 7.90B | 6.08B | Net Income Common Stockholders |
| 6.37B | 5.50B | 5.18B | 5.90B | 4.93B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 14.59B | 8.74B | 7.42B | 9.32B | 8.66B | Total Assets |
| 138.62B | 123.21B | 117.63B | 152.65B | 176.98B | Total Debt |
| 14.22B | 9.70B | 8.49B | 9.32B | 7.26B | Net Debt |
| 1.46B | 966.00M | 1.07B | -5.00M | -1.40B | Total Liabilities |
| 89.26B | 81.97B | 78.84B | 113.75B | 139.33B | Stockholders Equity |
| 43.62B | 39.35B | 37.74B | 37.69B | 35.28B |
| Cash Flow | Free Cash Flow | |||
| 4.70B | 3.79B | 4.42B | 4.60B | 3.55B | Operating Cash Flow |
| 4.96B | 4.14B | 4.96B | 4.94B | 3.74B | Investing Cash Flow |
| -3.00B | -933.00M | -1.13B | -1.94B | -254.00M | Financing Cash Flow |
| 2.24B | -1.99B | -5.44B | -2.29B | 244.00M |
BlackRock Technical Analysis
Negative
822.62
Price Trends
966.48
Negative
993.09
Negative
936.74
Negative
Market Momentum
-3.10
Negative
45.05
Neutral
34.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BLK, the sentiment is Negative. The current price of 822.62 is below the 20-day moving average (MA) of 936.36, below the 50-day MA of 966.48, and below the 200-day MA of 936.74, indicating a bearish trend. The MACD of -3.10 indicates Negative momentum. The RSI at 45.05 is Neutral, neither overbought nor oversold. The STOCH value of 34.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BLK.
BlackRock Risk Analysis
BlackRock disclosed 46 risk factors in its most recent earnings report. BlackRock reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
BlackRock Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $127.71B | 19.58 | 14.67% | 2.49% | 12.15% | 15.17% | |
71 Outperform | $5.74B | 10.88 | 5.31% | 6.40% | 3.97% | ― | |
70 Outperform | $18.36B | 9.02 | 20.60% | 6.04% | 9.80% | 17.87% | |
68 Neutral | $16.77B | 8.80 | 16.32% | 3.49% | 29.42% | 92.95% | |
66 Neutral | $9.20B | 26.85 | 2.76% | 7.20% | 9.48% | -65.57% | |
66 Neutral | $22.00B | 9.28 | 10.93% | 3.80% | 20.53% | 49.80% | |
63 Neutral | $12.86B | 9.17 | 9.14% | 4.78% | 16.41% | -10.11% |
* Financial Sector Average
Performance Comparison
BLK
BlackRock
822.62
37.45
4.77%
BEN
Franklin Resources
17.51
-8.13
-31.71%
IVZ
Invesco
12.81
-3.31
-20.53%
STT
State Street
76.25
2.44
3.31%
TROW
T Rowe Price
82.60
-29.58
-26.37%
NTRS
Northern
86.01
0.79
0.93%
BlackRock Earnings Call Summary
Earnings Call Date: Jan 15, 2025 | % Change Since: -14.13% | Next Earnings Date: Apr 11, 2025
Earnings Call Sentiment Positive
The earnings call highlighted BlackRock's strong financial performance and strategic growth initiatives in 2024, marked by record net inflows, AUM growth, and expansion into private markets and technology services. However, the call also noted some challenges, including nonoperating losses and increased expenses. Overall, the sentiment leans positive due to the substantial achievements and growth potential outlined.Highlights
Record Net Inflows and AUM Growth
BlackRock saw record net inflows in 2024, with $641 billion in total net inflows and $281 billion in the fourth quarter alone. The AUM grew to nearly $11.6 trillion.
Strong Financial Performance
Annual revenue increased by 14%, operating income by 23%, and earnings per share grew 15% year-over-year. Fourth quarter revenue was up 23%, and operating income increased by 36%.
Expansion in Private Markets
The acquisition of GIP closed in October, and with the planned acquisition of HPS and Preqin, private markets and technology are expected to make up over 20% of BlackRock's overall revenue.
Growth in Technology Services
Technology services revenue increased by 13% year-over-year, with full-year revenue of $1.6 billion, reflecting successful client onboarding and expansion.
ETF Growth and Innovation
BlackRock generated industry-leading ETF net inflows of $390 billion in 2024, with significant contributions from newly launched digital assets ETPs.
Lowlights
Nonoperating Losses and Interest Income Decline
Nonoperating results included $7 million of net investment losses and lower interest income due to cash delivery for the GIP transaction.
Increased G&A and Compensation Expenses
Full year G&A expenses increased by 5% due to planned technology investments and professional fees. Compensation expenses rose by 11% due to higher performance fees.
Company Guidance
During BlackRock's Q4 2024 earnings call, the company shared comprehensive financial metrics and strategic guidance for 2025. BlackRock reported record net inflows of $641 billion for the year, with $281 billion in Q4 alone, and achieved a 7% annualized organic base fee growth in the fourth quarter, its highest in three years. The firm's assets under management (AUM) reached nearly $11.6 trillion, contributing to a 23% increase in operating income to $8.1 billion and a 15% rise in earnings per share to $43.61. BlackRock's revenue hit $20.4 billion, marking a 14% year-over-year growth, with Q4 revenue up 23% to $5.7 billion. The company also achieved a 280 basis point margin expansion, driven by disciplined investments. Looking ahead, BlackRock aims to integrate its recent acquisitions, GIP, HPS, and Preqin, which are expected to enhance its private markets and technology revenue to over 20% of its total. The firm continues to focus on structural growth areas such as ETFs, Aladdin, outsourcing, and fixed income, with a target of 5% organic growth through market cycles.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.