We expect BlackRock to beat the consensus estimates for revenues and earnings. The firm posted better than expected results in the first quarter of 2021, mainly driven by growth in its Assets under Management (AuM) and technology services revenues. The AuM benefited from positive net inflows of $172 billion, net market appreciation, and the acquisition of Aperio. We expect the same trends to continue in the second quarter, as well. The forecast indicates that BlackRock’s valuation is around $883 per share, which is slightly more than the current market price of $877.
1) Revenues expected to be marginally ahead of the consensus estimates in Q2: Trefis estimates BlackRock’s fiscal Q2 2021 revenues to be around $4.62 billion, marginally above the $4.61 billion consensus estimate. The company reported 11% y-o-y revenue growth in 2020, mainly driven by the increase in AuM. Further, BLK’s Investment advisory, administration fees, and securities lending revenue from equity investments, which contribute close to 40% of the top-line, increased 26% y-o-y. It was driven by a 60% y-o-y rise in equity AuM to $4.75 trillion by the quarter-end.
2) EPS likely to beat the consensus estimates: BlackRock Q2 2021 adjusted earnings per share are expected to be $9.55 per Trefis analysis, 2% above the consensus estimate of $9.34. The company’s profitability figures grew in 2020, thanks to the revenue growth. Further, the firm adjusted net income improved 49% y-o-y in the first quarter, due to lower total expenses and higher revenues. We expect the same trend to continue in the second quarter, as well.
BlackRock Long (Buy) Enter at: 923.08 T.P_1: 992.58 T.P_2: 1050 T.P_3: 1130.20 S.L: 794.07
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