On Tuesday, BlackRock, Inc. (NYSE:BLK) shares, the world’s largest asset manager, saw its price target increase by Argus to $910 from the previous target of $880 while retaining a Buy rating. This adjustment follows the company's announcement on Monday of its second-quarter earnings, which exceeded expectations.
BlackRock reported an adjusted earnings per share (EPS) of $10.36 for the second quarter of 2024, a notable rise from $9.28 in the same quarter the previous year and surpassing the consensus forecast of $9.96. The firm's revenue saw an 8% increase, while assets under management (AUM) experienced a 13% surge, reaching $10.6 trillion.
The company also reported substantial long-term net inflows amounting to $51 billion during the second quarter. In light of these inflows and improving market valuations that have elevated AUM levels, the 2024 EPS estimate for BlackRock has been revised upwards.
A significant development for BlackRock this past quarter was the successful launch of its bitcoin ETF in the first quarter of 2024, which has rapidly grown to encompass $20 billion of net assets. The asset manager's ability to innovate and capture new market opportunities is reflected in this rapid expansion.
The rationale behind the price target hike is BlackRock's consistent performance, characterized by above-average operating margins, stable long-term asset inflows, and a track record of product innovation. These factors contribute to the belief that BlackRock should command a premium valuation relative to other large-cap financial stocks.
In other recent news, BlackRock Inc (NYSE:BLK). has seen notable developments in its financial performance and strategic moves. Citi and Evercore ISI have both raised their share target for BlackRock, citing confidence in the company's growth prospects.
This follows BlackRock's report of a record high of $10.65 trillion in assets under management (AUM) for Q2, driven by increased investor interest in exchange-traded funds (ETFs).
The company saw total net inflows of $81.57 billion during the quarter, with ETFs accounting for $83 billion of this amount. BlackRock's total revenue rose 8% to $4.81 billion and net income for the quarter ended June 30 was reported at $1.50 billion.
BlackRock has also disclosed its financial performance for the first half of 2024, including securing significant mandates like a $10 billion fixed-income pension mandate and its first substantial general account allocation for private structured credit.
The firm's acquisition of data provider Preqin for nearly $3.2 billion was reaffirmed, seen as a strategic move to deepen BlackRock's presence in the private markets and enhance its capabilities in alternative investments.
In the meantime, Singapore's state investor Temasek Holdings, which holds about 3% in BlackRock, reported a 1.8% increase in its net portfolio value, reaching $288.5 billion.
This growth was primarily driven by profitable investments in the United States and India, offsetting weaker performance in China. These are among the recent developments that have shaped BlackRock's current position in the market.
InvestingPro Insights
InvestingPro data highlights BlackRock's robust financial health and growth prospects. With a market capitalization of $121.96 billion and a price-to-earnings (P/E) ratio of 20.55, BlackRock stands out in the financial sector. The company's revenue growth over the last twelve months as of Q2 2024 is 7.68%, showcasing its ability to expand effectively. Furthermore, BlackRock's gross profit margin of 49.32% indicates a strong ability to retain earnings after the cost of goods sold is accounted for.
Two InvestingPro Tips shed light on BlackRock's reliability and potential concerns for investors. The firm has a commendable history of raising its dividend for 14 consecutive years, signaling confidence in its financial stability and a commitment to returning value to shareholders. However, investors should note that 8 analysts have revised their earnings expectations downwards for the upcoming period, which may suggest potential challenges ahead.
For readers interested in a deeper analysis, additional InvestingPro Tips are available, including insights on BlackRock's valuation metrics and profitability. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and access more exclusive insights to inform your investment decisions.
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