BlackRock, a prominent financial services company, has seen its stock (NYSE: BLK) gain approximately 4% year-to-date, contrasting with the 17% rise in the S&P 500 index over the same period. In comparison, BlackRock's peer, State Street's stock (NYSE: STT), has experienced a 10% increase year-to-date.
Currently trading at $845 per share, BLK stock is estimated to be undervalued by 10% at its fair value of $938 according to Trefis. Despite a 15% increase from early January 2021, the stock's performance has been inconsistent, with returns of 27% in 2021, -23% in 2022, and 15% in 2023.
BlackRock's second-quarter results for 2024 showed a mixed performance, with earnings surpassing expectations but revenues falling short. Total revenues reached $4.81 billion, up 8% year-over-year, driven by growth in base fees and higher technology services revenue. The company's average assets under management rose by 14% to $10.46 trillion.
In fiscal year 2023, BlackRock's total revenues slightly decreased to $17.86 billion, attributed to a drop in distribution and base fees. However, adjusted net income grew by 6% year-over-year to $5.5 billion.
Looking ahead to Q3 2024, BlackRock is expected to continue its growth trajectory, with forecasted revenues of $20.04 billion for the fiscal year. The adjusted net income margin may see a slight decline, resulting in an annual GAAP EPS of $40.18 and a valuation of $938 based on a P/E multiple of just above 23x.
Conclusion
Despite facing challenges in stock performance in recent years, BlackRock remains a key player in the financial sector with a strong asset management business. The company's focus on organic growth and cost management strategies will likely drive its future performance and position it for continued success in the market.
