On Wednesday, Goldman Sachs reiterated a Buy rating on BlackRock Inc (NYSE:BLK) with a steady price target of $1,159.00, following the asset manager's fourth-quarter earnings report. BlackRock's adjusted earnings per share (EPS) for the quarter reached $11.93, marking a 23% year-over-year increase and surpassing Goldman Sachs' estimate of $10.80 and the consensus forecast of $11.17.
The company's operating income of $2.33 billion was also 5% higher than consensus estimates, buoyed by robust top-line growth and a stronger-than-anticipated bottom line.
According to InvestingPro, BlackRock has maintained dividend payments for 22 consecutive years and has raised its dividend for 15 straight years, demonstrating consistent shareholder returns alongside its strong earnings performance.For a deeper analysis of BlackRock's financial health and growth prospects, including 8 additional key insights, visit InvestingPro.
BlackRock's total revenue for the quarter stood at $5.67 billion, a 9% increase from the previous quarter and 2% above consensus, with a notable $94 million beat in performance fees. Management fees saw an impressive 10% quarterly and 23% yearly increase to $4.42 billion, aligned with expectations despite macroeconomic challenges such as a stronger U.S. dollar and diverse market performance.
The adjusted operating margin of 45.5% represented a nearly 400 basis point improvement year-over-year, outperforming the street's prediction of 44.3%. InvestingPro data shows that BlackRock's liquid assets exceed short-term obligations, indicating strong financial health, though it's currently trading at a high P/E ratio relative to near-term earnings growth.
Assets under management (AUM) totaled $11.55 trillion, showing a 1% quarterly increase but slightly missing consensus estimates by 1% due to negative market impacts and foreign exchange headwinds. Nevertheless, BlackRock experienced robust organic growth with $281 billion in total flows, primarily driven by $111 billion in net inflows to iShares Equity. The overall organic growth rate stood at approximately 10% annually, with a 7% annualized growth in organic fee base for the quarter.
Goldman Sachs highlighted BlackRock's strong position in organic fee growth within the industry, noting the company's ability to gain market share during periods of increased investor activity. The firm's results were seen as a testament to its competitive edge, with a better fee rate and solid operating income.
Looking ahead, BlackRock's management conveyed optimism for 2025, anticipating that the integration of alternative platforms and the potential for increased organic growth will position the company well for further acceleration.
In other recent news, BlackRock Inc. has been the focus of several significant developments. The company's CEO, Larry Fink, has projected a decade-long recovery from the recent wildfires in Los Angeles, which have caused extensive damage and may lead to a reconsideration of homeowners' insurance policies.
In financial terms, BlackRock recently disclosed its financial results for the fourth quarter and full year ended December 31, 2024, and held an investor conference call to discuss the results. The company's earnings release and supplemental materials are available as exhibits to the Form 8-K filed with the Securities and Exchange Commission.
In personnel changes, Mark Wiedman, a top executive at BlackRock and potential successor to CEO Larry Fink, has decided to leave the company after a 20-year tenure. In response, BlackRock is expected to promote several executives.
Furthermore, BlackRock has received various ratings from analyst firms. TD Cowen maintained a Buy rating on BlackRock but slightly reduced the price target from $1,224 to $1,223. Keefe, Bruyette & Woods also adjusted its price target for BlackRock, reducing it from $1,225.00 to $1,160.00, while maintaining an Outperform rating.
Finally, BlackRock has made a strategic move to acquire HPS Investment Partners for $12 billion, a move set to significantly enhance BlackRock's private credit portfolio. This acquisition has led analysts from Evercore ISI to raise their price target for BlackRock to $1,180, maintaining an Outperform rating on the stock.
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