On Wednesday, JPMorgan updated its outlook on BlackRock, Inc. (NYSE:BLK), a $157.1 billion asset management giant, raising the investment management firm's price target to $1,053 from $971, while maintaining a Neutral stock rating.
According to InvestingPro analysis, BlackRock is currently trading near its Fair Value. The adjustment follows BlackRock's fourth-quarter 2024 earnings report, which revealed adjusted earnings per share (EPS) of $11.93, surpassing both JPMorgan's and Bloomberg consensus estimates.
BlackRock's revenue exceeded expectations due to slightly higher base fees and considerably improved performance fees, particularly from equities and alternatives. The company achieved impressive revenue growth of 10.2% over the last twelve months, with a P/E ratio of 24.8. However, a significant portion of the earnings beat was attributed to a lower-than-expected tax rate, which accounted for approximately $0.55 of the EPS outperformance. Despite this tax-driven boost, BlackRock demonstrated robust organic asset and revenue growth.
The company's long-term inflows for the fourth quarter were notable at $201 billion, largely propelled by the strength of equity iShares, although the quarter-over-quarter pace of overall fixed income inflows decelerated. BlackRock remained steady in fixed income flows throughout 2024 but suggested that a surge in fixed income flows might be delayed.
The firm reiterated its view that a normalizing yield curve and higher long-term yields will eventually shift assets from cash into fixed income, although for the time being, cash holdings are proving to be more resilient than anticipated.
Cash management also saw a strong quarter with inflows of $81 billion in the fourth quarter, following the third quarter's $61 billion, indicating an uptick in the money fund industry. BlackRock's organic base fee growth stood at 7% for the quarter, supported by various factors including the addition of GIP, securities lending, and catch-up fees, which were slightly offset by beta headwinds.
The report by JPMorgan concludes by acknowledging BlackRock's solid performance in the fourth quarter of 2024 but also expressing caution regarding the maturation of the iShares business and potential future disappointments in fixed income flows. The updated December 2025 price target reflects these considerations and the ongoing discussion about the success of BlackRock's alternatives business. InvestingPro subscribers can access additional insights, including 8 more ProTips and a comprehensive analysis of BlackRock's financial health, which currently rates as FAIR. The platform's detailed Pro Research Report offers deeper insights into BlackRock's valuation and growth prospects.
In other recent news, BlackRock Inc (NYSE:BLK). has showcased strong financial health in recent developments. The company's fourth-quarter earnings report revealed an impressive adjusted earnings per share of $11.93, exceeding expectations set by Jefferies, Barclays (LON:BARC), Citi, and Goldman Sachs. Revenue for the quarter reached $5.68 billion, slightly above Citi's forecast. The investment giant also achieved long-term inflows of $201 billion, surpassing the estimated $159 billion. Analyst firms Barclays, Citi, and Goldman Sachs have maintained positive ratings on BlackRock's stock, with price targets ranging from $1,159 to $1,200. However, TD Cowen slightly reduced its price target from $1,224 to $1,223.
On the personnel front, top executive Mark Wiedman, who had been with the firm for 20 years, has decided to leave. BlackRock is expected to promote several executives in response to this change. In addition, BlackRock's CEO, Larry Fink, recently projected a decade-long recovery from the recent wildfires in Los Angeles, emphasizing the long-term implications for homeowners and the insurance industry.
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