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Investing.com - BlackRock (NYSE:BLK), the $172 billion market cap asset management giant, received a reiterated Buy rating and $1,200.00 price target from Citi on Tuesday, following its latest quarterly results. The stock is currently trading near its 52-week high of $1,112.13, with InvestingPro analysis suggesting the shares may be slightly overvalued at current levels.
BlackRock reported adjusted earnings per share of $12.05, significantly exceeding Citi’s estimate of $11.07 and the FactSet consensus of $10.78. The earnings beat was primarily driven by non-operating income of $521 million versus the estimated $165 million, with net investment gains of $550 million contributing approximately $1.55 per share relative to Citi’s expectations. The company’s strong performance is reflected in its impressive 14.23% revenue growth over the last twelve months.
Operating expenses came in lower than anticipated at $2.069 billion compared to estimates of $2.185 billion, with compensation expenses of $1.688 billion falling below Citi’s projection of $1.704 billion. Revenue reached $5.423 billion, slightly below Citi’s estimate of $5.499 billion, as the overall fee rate decreased to 14.9 basis points from 15.4 basis points in the first quarter of 2025.
BlackRock maintained solid organic base fee growth of 6%, unchanged from the previous quarter. The company reported $68 billion in flows, exceeding Citi’s estimate of $56 billion but declining from $84 billion in the first quarter of 2025.
Citi characterized the results as "a bit of a mixed quarter" due to the nature of the earnings beat and continued declines in fee rates, suggesting the stock "could face near-term headwinds" despite the firm’s maintained Buy rating. The stock has delivered a strong 38% return over the past year, though InvestingPro data indicates it’s trading at a relatively high P/E ratio of 26.64. For deeper insights into BlackRock’s valuation and growth prospects, including 13 additional exclusive ProTips, check out the comprehensive Pro Research Report available on InvestingPro.
In other recent news, BlackRock reported second-quarter 2025 earnings per share of $12.05, surpassing both Jefferies’ estimate of $10.54 and the consensus forecast of $10.78. Despite revenue falling short of expectations by $64 million, lower expenses led to an adjusted operating income that exceeded projections by $74 million. Morgan Stanley (NYSE:MS) raised its price target for BlackRock to $1,247, citing a 7% increase based on a higher price-to-earnings multiple and an updated forecast for assets under management. The firm also adjusted its long-term net flows forecast to $85 billion for the second quarter, up from a previous estimate of $48 billion. Additionally, BlackRock has agreed to acquire ElmTree Funds, a net-lease real estate investment firm with $7.3 billion in assets under management, to enhance its Private Financing Solutions platform. The transaction, expected to close in the third quarter of 2025, is subject to regulatory approvals. In another development, Jio BlackRock Asset Management, a joint venture with Jio Financial Services, raised over $2.1 billion in its first fund offering. Furthermore, BlackRock is observing a trend among its clients to diversify away from U.S. markets, with an increasing interest in Asia-Pacific investments.
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