BlackRock Stock Topped The Consensus In Q4, What’s Next?

-1.21%
Downside
759
Market
750
Trefis
BLK: BlackRock logo
BLK
BlackRock

BlackRock’s stock (NYSE: BLK) has gained 3% YTD as compared to the 2% rise in the S&P500 index over the same period. Further, at its current price of $730 per share, the stock is trading 3% below its fair value of $750 – Trefis’ estimate for BlackRock’s valuationThe world’s largest asset manager outperformed the consensus estimates of revenues and earnings in the fourth quarter of 2022. It posted total revenues of $4.3 billion – down 15% y-o-y, mainly due to the impact of lower market valuations and negative FX movement on assets under management (AuM). The total investment advisory, administration fees & securities lending revenue (base fees) decreased 14% y-o-y to $3.4 billion. Notably, the average AuM was down by 14% y-o-y to $8.4 trillion. Overall, the adjusted net income fell by 23% y-o-y to $1.26 billion, partly due to a drop in the top line and partly due to higher operating expenses as a % of revenues.

The total revenues decreased by 8% y-o-y to $17.9 billion in FY 2022. It was primarily driven by a 5% drop in the base fees, followed by a 55% decline in the performance fees. On the flip side, the top line was somewhat supported by a 6% rise in technology service revenues. Altogether, the adjusted net income decreased 12% y-o-y to $5.2 billion.

Moving forward, we expect the AuM to remain under pressure for some more time due to tough macroeconomic conditions. Markedly, consensus estimates for Q1 2023 revenues and earnings are $4.22 billion and $7.96 respectively. All in all, BlackRock revenues are forecast to touch $18.37 billion in FY2023. Additionally, BLK’s adjusted net income margin is likely to see a slight drop in the year, resulting in an adjusted net income of $5 billion and an annual GAAP EPS of $33.50. This coupled with a P/E multiple of just above 22x will lead to a valuation of $750.

Relevant Articles
  1. BlackRock To Top The Earnings Consensus In Q4?
  2. Is BlackRock Stock Fairly Priced?
  3. What To Expect From BlackRock Stock In Q3?
  4. BlackRock Stock Missed The Consensus In Q2, What To Expect?
  5. After An 11% Gain In One Week, What Is Next For BlackRock Stock?
  6. BlackRock Stock Lost 30% YTD, What To Expect?

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Jan 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 BLK Return 3% 3% 92%
 S&P 500 Return 2% 2% 74%
 Trefis Multi-Strategy Portfolio 5% 5% 231%

[1] Month-to-date and year-to-date as of 1/20/2023
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios

See all Trefis Price Estimates