Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 9 Dec, 24 | BLK | Buy | USD 1042.87 | USD 1136.73 | USD 1220.16 | 53 days | 17.0% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
BlackRock, Inc. is a publicly owned investment manager. The firm primarily provides its services to institutional, intermediary, and individual investors including corporate, public, union, and industry pension plans, insurance companies, third-party mutual funds, endowments, public institutions, governments, foundations, charities, sovereign wealth funds, corporations, official institutions, and banks. It also provides global risk management and advisory services. The firm manages separate client-focused equity, fixed income, and balanced portfolios. It also launches and manages open-end and closed-end mutual funds, offshore funds, unit trusts, and alternative investment vehicles including structured funds. The firm launches equity, fixed income, balanced, and real estate mutual funds. It also launches equity, fixed income, balanced, currency, commodity, and multi-asset exchange traded funds. The firm also launches and manages hedge funds. It invests in the public equity, fixed income, real estate, currency, commodity, and alternative markets across the globe. The firm primarily invests in growth and value stocks of small-cap, mid-cap, SMID-cap, large-cap, and multi-cap companies. It also invests in dividend-paying equity securities. The firm invests in investment grade municipal securities, government securities including securities issued or guaranteed by a government or a government agency or instrumentality, corporate bonds, and asset-backed and mortgage-backed securities. It employs fundamental and quantitative analysis with a focus on bottom-up and top-down approach to make its investments. The firm employs liquidity, asset allocation, balanced, real estate, and alternative strategies to make its investments. In real estate sector, it seeks to invest in Poland and Germany. The firm benchmarks the performance of its portfolios against various S&P, Russell, Barclays, MSCI, Citigroup, and Merrill Lynch indices. BlackRock, Inc. was founded in 1988 and is based in New York City with additional offices in Boston
Earnings and Profitability: Earnings per share rose 2% to USD 10.90 in Q3 2024, with adjusted earnings up 5% to USD 11.46. Operating income grew 22% to USD 2.006 billion.
Revenue Growth: BlackRock saw a 15% increase in Q3 2024 revenue to USD 5.197 billion and an 11% year-to-date growth, totaling USD 14.730 billion.
Acquisition Costs: The planned acquisition of Preqin for £2.55 billion may strain the balance sheet and profitability, depending on integration outcomes.
Acquisition Integration Risk: BlackRock's acquisition of GIP for USD 3 billion may face integration challenges, impacting growth potential.
Increased Competition in Asset Management, Volatility in Private Market Investments, Technological Risk, Concentration of Revenue from Large Clients, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 1042.87 | 907.3 | 1136.73 | 1220.16 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strategic Acquisitions and Expansion
BlackRock made impactful acquisitions in 2024, including acquiring SpiderRock Advisors to enhance its personalized wealth management offerings. The planned acquisition of Preqin for £2.55 billion will strengthen its private markets data and technology capabilities. Additionally, the acquisition of GIP expands BlackRock’s global infrastructure portfolio, enhancing its asset management and origination strengths.
Strong Financial Performance and Revenue Growth
In Q3 2024, BlackRock saw a 15% increase in total revenue, reaching $5.197 billion, with operating income growing 22% to $2.006 billion. This growth was driven by higher investment advisory fees, favorable market conditions, and organic growth, reflecting the firm’s ability to generate value in a dynamic market.
Increased Earnings Per Share and Return on Investment
Earnings per diluted share increased by 2% to $10.90, with adjusted earnings per share rising 5% to $11.46 in Q3 2024. These gains reflect BlackRock’s operational efficiency and strong shareholder returns, driven by higher operating income and strategic investments.
Year-to-Date Growth and Profitability
For the first nine months of 2024, BlackRock achieved an 11% revenue growth, totaling $14.730 billion, with operating income up 15% to $5.5 billion. Strong growth in base fees and performance fees, combined with effective cost management, highlights the company’s continued success and profitability.
Successful Integration of Strategic Investments
BlackRock’s $3 billion acquisition of GIP strengthens its global infrastructure capabilities, positioning the firm as a leader in the sector. This transaction enhances BlackRock’s infrastructure asset management and origination capabilities, positioning it for future growth opportunities.
As per the above-mentioned fundamental analysis, a ‘Buy’ rating has been given to BlackRock, Inc. (NYSE: BLK) at the closing market price of USD 1,042.87 as of December 06, 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Financial Services Industry: Asset Management
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| BLK BlackRock Inc |
0.52 0.05% | 947.00 | 23.92 | 21.23 | 8.04 | 3.78 | 7.54 | 16.86 |
| BX Blackstone Group Inc |
2.27 1.63% | 142.06 | 63.48 | 31.95 | 20.18 | 20.26 | 16.48 | |
| APO Apollo Global Management LLC Class A |
0.54 0.39% | 137.48 | 18.23 | 20.92 | 3.08 | 6.11 | 2.73 | 14.76 |
| KKR KKR & Co LP |
1.50 1.30% | 117.11 | 29.90 | 16.84 | 4.76 | 3.56 | 2.50 | 4.66 |
| IVSBF Investor AB ser. B |
0.004 0.01% | 30.45 | 6.10 | - | 0.41 | 1.04 | 0.24 | 1.68 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short to medium term duration. Recommendations provided in this report are solely based on fundamental parameters, in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is December 06, 2024. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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