On Tuesday, TD Cowen maintained a Buy rating on BlackRock Inc (BVMF:BLAK34). (NYSE: NYSE:BLK) but slightly reduced the price target from $1,224 to $1,223. The adjustment followed a revision of the asset management firm's earnings forecasts for the fourth quarter of 2024 and the full years of 2025 and 2026.
The revisions were primarily due to a lower net asset value (NAV) resulting from recent market movements. Currently trading at $959.81, BlackRock commands a market capitalization of $148.58 billion and maintains a P/E ratio of 23.5. According to InvestingPro data, nine analysts have recently revised their earnings estimates downward for the upcoming period.
Analysts at TD Cowen updated their model to reflect equity and fixed income returns up until January 10th. This led to a marginal decrease in the fourth quarter 2024 earnings per share (EPS) estimate, which now stands at $10.93, roughly 2% below the consensus forecast of $11.18. The revised estimates for 2025 and 2026 are $47.18 and $54.10, respectively, compared to the previous forecasts of $47.12 and $54.27.
BlackRock's strong financial position is evidenced by its 15-year streak of dividend increases and robust liquidity position, with InvestingPro analysis showing liquid assets exceeding short-term obligations.
The changes in the earnings forecast are attributed to an adverse impact on assets under management (AUM) due to weaker NAVs. Despite this, TD Cowen's forecasts for the years 2025 and 2026 remain mostly aligned with the consensus. The firm recently highlighted BlackRock as one of its preferred traditional asset managers for 2025, a stance they continue to hold.
The analysts believe that while BlackRock is not immune to short-term market volatility, its platform is expected to be both defensive and differentiated as the new year progresses. The price target of $1,223 is based on a 25 times multiple of the revised 2026 earnings estimate, which remains unchanged from the previous valuation.
In other recent news, BlackRock Inc. has been the subject of several significant developments. The company has announced plans to cut approximately 1% of its workforce, despite intending to hire an additional 2,000 employees this year. This decision follows the company's $25 billion expenditure on acquisitions last year.
In terms of earnings, Keefe, Bruyette & Woods (KBW) has adjusted its price target for BlackRock, reducing it from $1,225.00 to $1,160.00, while maintaining an Outperform rating. KBW's analysis suggests a mixed outlook for BlackRock's upcoming earnings, with projections slightly lower than consensus for adjusted operating income, but more optimistic about long-term flows.
BlackRock has also undertaken strategic acquisitions, notably the purchase of HPS Investment Partners for $12 billion. This acquisition is set to significantly enhance BlackRock's private credit portfolio, increasing its total private market assets to $410 billion. Analysts from Evercore ISI have raised their price target for BlackRock to $1,180 in light of this acquisition, maintaining an Outperform rating on the stock.
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