BlackRock Founders as Q2 Earnings Fail to Reach Goal

Gladys Abbott
July 17, 2017

Morgan Stanley reiterated an "overweight" rating and set a $460.00 target price (up from $422.00) on shares of BlackRock in a research note on Monday, July 10th. Deutsche Bank AG reaffirmed a "buy" rating and issued a $441.00 price target (down previously from $449.00) on shares of BlackRock in a research report on Saturday, April 22nd. BLK's current price-earnings ratio amounts to 21.54 times earnings, below the average P/E ratio of 125.21 times earnings.

BlackRock, Inc. (NYSE:BLK)'s stock had its "hold" rating reiterated by investment analysts at Keefe, Bruyette & Woods in a research report issued to clients and investors on Friday. Alyeska Investment Group L.P. now owns 91,479 shares of the asset manager's stock worth $34,811,000 after buying an additional 66,503 shares during the period.

BlackRock (BLK) opened at 438.34 on Tuesday. The company's stock had a trading volume of 766,228 shares. The firm's 50 day moving average is $410.09 and its 200-day moving average is $390.31.

BlackRock (NYSE:BLK) last released its quarterly earnings results on Wednesday, April 19th. In last year's second quarter, BlackRock reported $4.78 per share in earnings on $2.8 billion in revenue.

Revenue from investment advisory, administration fees and securities lending rose to $2.675 billion, roughly in line with expectations. The margins are "subdued" during Aladdin's implementation process, but increased utilization and subsequent revenues will shift Aladdin to the front of BlackRock's operations. State of Alaska Department of Revenue purchased a new position in shares of BlackRock during the first quarter worth about $108,000. In the year-earlier period, the company had posted adjusted earnings of $4.78 per share on sales of $2.804 billion. Analysts are expecting EPS growth rates to be at -3.80% this quarter and EPS estimate for next year reflect 13.63% growth rate.

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The firm also recently declared a quarterly dividend, which was paid on Friday, June 23rd. Investors of record on Monday, June 5th were paid a dividend of $2.50 per share. The ex-dividend date of this dividend was Thursday, June 1st. This represents a $10.00 dividend on an annualized basis and a yield of 2.28%. BlackRock's dividend payout ratio (DPR) is presently 49.14%. Also, Director Susan Wagner sold 2,500 shares of BlackRock stock in a transaction on Friday, June 2nd. Following the completion of the sale, the director now directly owns 484,386 shares in the company, valued at $200,685,963.66. The sale was disclosed in a filing with the SEC, which is available at the SEC website.

BlackRock's stock has risen 15% while the S&P 500 has risen 9.8% respectively. The stock was sold at an average price of $405.98, for a total value of $202,990.00. The disclosure for this sale can be found here. Institutional investors and hedge funds own 80.84% of the company's stock. State of Alaska Department of Revenue acquired a new position in shares of BlackRock during the first quarter valued at $108,000. Edge Asset Management Inc. now owns 378,230 shares of the asset manager's stock valued at $143,932,000 after buying an additional 7,490 shares during the last quarter.

Assets under management: $5.689 trillion vs $5.66 trillion expected by StreetAccount. Finally, Migdal Insurance & Financial Holdings Ltd. boosted its stake in BlackRock by 95.5% in the fourth quarter. The brokerage now has a "buy" rating on the asset manager's stock. Insiders own 1.86% of the company's stock.

More than ever, Mr. Fink is positioning BlackRock to focus on such systematic investment strategies as basic index funds, E.T.F.s and blended strategies like smart beta and factors that target investment themes like momentum and low volatility. Aladdin will be a "transformation" for BlackRock to excel in portfolio construction and risk management.

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