CTAs keep buying Treasuries, gold longs face stop-loss risk: BofA
On Monday, Goldman Sachs increased its price target for BlackRock Inc (NYSE:BLK) to $1,118 from $1,040, while reiterating a Buy rating on the stock. The adjustment follows BlackRock's third-quarter earnings, which surpassed expectations with a return to 5% organic base fee growth and a significant margin expansion.
BlackRock reported substantial firm-wide inflows totaling $221 billion, contributing to its robust organic growth. The company's margin saw an impressive rise to 45.8%, a year-over-year increase of approximately 350 basis points. This performance led to a notable outperformance of the stock today.
The analysts from Goldman Sachs have increased the estimated earnings per share (EPS) for the years 2024 to 2026 to $43.30, $48.65, and $55.11, respectively, up from the previous estimates of $41.57, $46.46, and $52.97. This revision includes the impact of the recent debt raised in July for the proposed acquisition of Preqin but excludes any potential accretion from the acquisition.
BlackRock's recent success is attributed to the closing of the GIP acquisition and stronger margins. The analyst projects that BlackRock will maintain at least 5% organic base fee growth, potentially increasing in the fourth quarter due to seasonal tailwinds. This growth is expected to be supported by continued strong momentum in ETFs, active institutional channel engagement, and new private market initiatives launching in 2025.
The firm is also anticipated to sustain positive operating leverage, assuming normal market conditions, as it focuses on financial discipline over margin awareness. Goldman Sachs predicts that BlackRock's operating income and EPS will grow at a low-to-mid-teens rate over the next one to two years. The revised 12-month price target of $1,118 is based on a forward price-to-earnings (P/E) multiple of 21 times.
In other recent news, BlackRock Inc. reported record-breaking net inflows of $221 billion for the third quarter of 2024, the highest in its history. The company also saw a 15% year-over-year increase in quarterly revenue to $5.2 billion and a 26% rise in operating income to $2.1 billion.
Evercore ISI, a reputable analyst firm, has increased its price target for BlackRock to $1,040, maintaining an Outperform rating on the company's shares. This adjustment reflects BlackRock's efforts to expand its capabilities in the private markets sector, including the integration of Global Infrastructure Partners for infrastructure projects and the acquisition of Preqin to meet rising demand for data and indices.
Moreover, BlackRock's assets under management have reached a staggering $11.5 trillion, with its ETF platform, iShares, generating $97 billion in net inflows during the third quarter. The company is optimistic about its growth trajectory, expecting to capitalize on various growth opportunities across the industry.
InvestingPro Insights
BlackRock's strong performance, as highlighted in the article, is further supported by real-time data from InvestingPro. The company's market capitalization stands at an impressive $146.98 billion, reflecting its dominant position in the asset management industry. BlackRock's revenue growth of 10.22% over the last twelve months and a quarterly growth of 14.93% in Q3 2024 align with the analyst's positive outlook on the company's organic base fee growth.
InvestingPro Tips indicate that BlackRock has raised its dividend for 14 consecutive years, demonstrating a commitment to shareholder returns. This is particularly relevant given the company's strong financial performance and margin expansion mentioned in the article. Additionally, the tip that BlackRock is trading near its 52-week high corroborates the stock's recent outperformance noted by Goldman Sachs.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips on BlackRock, providing deeper insights into the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.