2023-04-13 15:25:35 ET
BlackRock ( NYSE: BLK ) will report its Q1 earnings on Friday, April 14, before markets open. Analysts are expecting a relatively weaker quarter on account of muted net flows as clients continued de-risking in the current market backdrop.
The asset manager is expected to report EPS of $7.69, 19.2% lower Y/Y, and revenue of $4.24B, down 9.8% Y/Y.
"Our Q1 EPS estimate ($7.70) assumes revenues will decline 5%-8% as lower asset values are partly offset by continued (albeit lower) net inflows that we estimate will top $80B," said Cathy Seifert, vice president, CFRA Research.
"Q1 industry-wide fund flow trends reflected a long-term pattern of equity mutual fund net outflows, as well as inflows into passive vehicles like ETFs, a pattern that benefits BLK as the largest ETF provider," Seifert noted, maintaining her Strong Buy rating.
UBS, which rates BlackRock ( BLK ) Neutral, expects net flows will be "relatively weak for active managers, despite the usual positive Q1 seasonality, with greater passive mix driving positive flows at BLK."
However, Jefferies remains bullish. "Our Q1 EPS estimate increases to $7.95 from $7.71 largely due to beta (higher average AUM), with offset from seasonally lower performance fees of $50M vs. $228M in Q4 2022," said analyst Daniel Fannon.
Over the last 2 years, BLK has beaten EPS estimates 88% of the time and revenue estimates 63% of the time.
Over the last 3 months, EPS estimates have seen 4 upward revisions and 7 downward. Revenue estimates have seen 3 upward revisions and 4 downward.
SA contributor Mike Zaccardi believes BlackRock ( BLK ) is fairly valued. "The valuation is priced right, while the chart is neutral but potentially turning bullish later on."
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BlackRock Q1 earnings expected to be weighed by weaker net flows