BlackRock Stock Topped The Earnings Consensus In Q2

BLK: BlackRock logo

BlackRock’s stock (NYSE: BLK) has gained 7% YTD as compared to the 19% rise in the S&P500 index over the same period. Further, at its current price of $757 per share, the stock is trading 6% below its fair value of $803 – Trefis’ estimate for BlackRock’s valuationThe company surpassed the consensus estimates of earnings in the second quarter of 2023, but revenues marginally missed expectations. It reported total revenues of $4.46 billion, which was 1% below the year-ago figure. The top line suffered due to a slight drop in the distribution fees and base fees (total investment advisory, administration fees & securities lending revenue). Notably, the average AuM was up by 2% y-o-y to $9.19 trillion and total net inflows were $80 billion in Q2. On the cost front, the operating expenses as a % of revenues witnessed a marginal increase. However, it was more than offset by an increase in non-operating income from -$347 million to $251 million. Overall, the adjusted net income improved by 27% y-o-y to $1.37 billion.

The total revenues decreased by 6% y-o-y to $8.7 billion in the first half of 2023. It was primarily driven by a 5% drop in the base fees, followed by a 14% decline in the distribution fees. On the flip side, the top line was somewhat supported by a 4% rise in technology service revenues. Further, the non-operating income increased from -$485 million to $367 million, offsetting the negative impact of lower revenues. It led to an adjusted net income of $2.52 billion – at par with the year-ago figure.

Moving forward, we expect the average AuM to see some growth over the subsequent quarters. Altogether, BlackRock revenues are estimated to touch $18.38 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 $5.13 billion and an annual GAAP EPS of $34.19. This coupled with a P/E multiple of just below 24x will lead to a valuation of $803.

Relevant Articles
  1. Trailing S&P500 BY 11% YTD, Where Is BlackRock Headed?
  2. Rising 24% In The Last Six Months, How Will BlackRock Stock Trend After 2024 Q1 Results?
  3. Up 10% Since The Beginning Of 2023, What Should You Expect From BlackRock Stock?
  4. Up 10% In The Last Six Months, Does BlackRock Stock Have More Room For Gains?
  5. Will BlackRock Stock Top The Estimates In Q3?
  6. BlackRock Stock To Beat The Street Expectations In Q2

What if you’re looking for a portfolio that aims for long-term growth? Here’s a value portfolio that’s done much better than the market since 2016.

 Returns Jul 2023
MTD [1]
YTD [1]
Total [2]
 BLK Return 9% 7% 99%
 S&P 500 Return 2% 19% 103%
 Trefis Multi-Strategy Portfolio 6% 26% 305%

[1] Month-to-date and year-to-date as of 7/25/2023
[2] Cumulative total returns since the end of 2016

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates