BLK - Blackrock: An Attractive Setup To Buy A Globally Leading Franchise
2024-04-20 08:09:37 ET
Summary
- BlackRock outperformed estimates in Q1 2024, as the world's leading investment franchise saw its revenues, operating earnings, and AUM grow by 11%, 18%, and 15% YoY, respectively.
- Buoyed by these robust results and positive management outlook for FY 2024, BlackRock is well-positioned for significant earnings growth.
- My optimism for revenue/ earnings growth acceleration is fueled by a revitalized bull market, which is expected to boost asset management levels and expand fee income.
- All things considered, I see a compelling entry point for this high-quality asset management franchise,currently trading at a 15x projected 2025 P/E ratio, according to data collected by Refinitv.
- Anchored on a residual earnings framework, my calculation calls for a fair implied target price of $880/ share,suggesting approximately 15% upside to fundamentals. "Buy".
Blackrock ( BLK ) delivered a strong Q1 2024 performance, beating analyst consensus estimate on both topline and earnings. During the first quarter, Blackrock's revenues, operating earnings, and assets under management increased by 11%, 18%, and 15% YoY. Reflecting on strong Q1 results, paired with confident management commentary on the FY 2024 outlook, I see Blackrock poised for significant earnings upside, buoyed by the resurgence of a bull market across equities, cryptocurrencies, and various tradable asset classes, which is expected to drive higher asset under management levels and increase the company's capital base for fee generation. On valuation, I see upside too: Considering a residual earnings valuation framework, I calculate that Blackrock shares may be about 15% undervalued....
Blackrock: An Attractive Setup To Buy A Globally Leading Franchise