|
Related Topics
|
Category: Stock Market and BlackRock
Date: 17 April 2020 Stock Price: $458.99 We take a look at the 1st quarter earnings report of their 2019 fiscal year of BlackRock the fiduciary firm that has approximately $7.124 trillion in assets under management on behalf of clients across the world. The group saw massive net inflows of $34.988 billion during the 1st quarter of 2020
|
About BlackRock
BlackRock helps investors build better financial futures. As a fiduciary to investors and a leading provider of financial technology, our clients turn to us for the solutions they need when planning for their most important goals. As of December 31, 2019, the firm managed approximately $7.429 trillion in assets on behalf of investors worldwide
Overview of BlackRock's 1st quarter 2020 earnings report
Data below is reported for the latest quarter unless stated otherwise
- Revenue: $3.710 billion (up from $3.346 billion for the same quarter of the previous year)
- Revenue increased by 10.8% over the last 12 months
- Total expenses: $3.026 billion (up from $2.113 billion for the same quarter of the previous year)
- Total expenses increased by 43.2% over the last 12 months
- Some margin squeeze as revenue increased at a lot lower rate than their expenses
- Net income: $806 million (down from 1.053 billion for the same quarter of the previous year)
- Diluted earnings per share: $5.15 (down from $6.61 for the same quarter of the previous year)
- PE ratio of BlackRock: 22.7
- Dividend declared for quarter: $3.63 (up from $3.30 for the same quarter of the previous year)
- Dividend yield of BlackRock: 3.16%
- Diluted weighted-average shares outstanding: 156.416 million (down from 159.348 million for the same quarter of the previous year)
- Average Assets under management by BlackRock: $7.124 trillion (up from $6.316 trillion for the same quarter of the previous year)
- Total net inflows for the quarter: $34.988 billion
BlackRock's management commentary on their 1st quarter 2020 earnings report
New York, April 16, 2020 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three months ended March 31, 2020
Laurence D. Fink, Chairman and CEO: “The coronavirus outbreak has transformed the world, creating unprecedented human and economic hardship. Everyone at BlackRock is humbled and inspired by the work of the first-line responders around the world, and we are deeply grateful for all that they are doing. Our overriding priority at BlackRock today is the health and safety of our employees and their families. Amidst extraordinary circumstances, they have rebuilt BlackRock beyond its walls delivering the operational resilience and support our clients depend on and need more than ever before. “As our clients seek insights, advice and solutions, our diversified investment and technology platform is enabling us to have richer conversations with them even in this virtual environment, about all aspects of their portfolios. We believe BlackRock is more differentiated in this environment than ever before.
“The strategic investments we’ve made over recent years in key areas for growth continue to deliver. iShares ETFs have acted as a valuable market technology as investors once again turned to bond ETFs for price transparency and incremental liquidity in volatile markets. iShares sustainable ETFs had a record quarter with $10 billion of net inflows. We had one of our best quarters in illiquid alternative fundraisings ever, generating $7 billion in new flows and commitments. Our cash management business captured over $50 billion in net inflows as clients sought to de-risk rapidly. Aladdin continued to provide best-in-class portfolio and risk analytics, while facilitating record trading volumes and enabling remote operations. And our Financial Markets Advisory group is again partnering with various central banks on programs to facilitate market efficiency and support the global economy. “BlackRock is honored by the trust that clients, governments and communities have placed in us and I am incredibly proud of our employees for the way they have come together – guided by our longstanding principles and purpose – to support each other, our clients and communities during this time of great need.”
- $35 billion of quarterly total net inflows reflects strength of diversified investment management platform
- 11% increase in revenue year-over-year driven by higher base fees and 34% growth in technology services revenue, reflecting the impact of the eFront acquisition and continued Aladdin® momentum
- Year-over-year decreases in GAAP operating income and diluted EPS impacted by previously announced $589 million pre-tax charitable contribution, which has been excluded from as adjusted results
- 3% increase in year-over-year as adjusted operating income also includes the impact of $84 million of fund launch costs in 2020
- 0% change in as adjusted diluted EPS reflects higher yearover-year as adjusted operating income, a lower effective tax rate and lower diluted share count in the current quarter, offset by lower as adjusted nonoperating income
- Consistent capital management supported by $400 million of share repurchases in the current quarter and 10% increase in quarterly cash dividend to $3.63 per share
Laurence D. Fink, Chairman and CEO: “The coronavirus outbreak has transformed the world, creating unprecedented human and economic hardship. Everyone at BlackRock is humbled and inspired by the work of the first-line responders around the world, and we are deeply grateful for all that they are doing. Our overriding priority at BlackRock today is the health and safety of our employees and their families. Amidst extraordinary circumstances, they have rebuilt BlackRock beyond its walls delivering the operational resilience and support our clients depend on and need more than ever before. “As our clients seek insights, advice and solutions, our diversified investment and technology platform is enabling us to have richer conversations with them even in this virtual environment, about all aspects of their portfolios. We believe BlackRock is more differentiated in this environment than ever before.
“The strategic investments we’ve made over recent years in key areas for growth continue to deliver. iShares ETFs have acted as a valuable market technology as investors once again turned to bond ETFs for price transparency and incremental liquidity in volatile markets. iShares sustainable ETFs had a record quarter with $10 billion of net inflows. We had one of our best quarters in illiquid alternative fundraisings ever, generating $7 billion in new flows and commitments. Our cash management business captured over $50 billion in net inflows as clients sought to de-risk rapidly. Aladdin continued to provide best-in-class portfolio and risk analytics, while facilitating record trading volumes and enabling remote operations. And our Financial Markets Advisory group is again partnering with various central banks on programs to facilitate market efficiency and support the global economy. “BlackRock is honored by the trust that clients, governments and communities have placed in us and I am incredibly proud of our employees for the way they have come together – guided by our longstanding principles and purpose – to support each other, our clients and communities during this time of great need.”
Revenue by product or service type for BlackRock for the 1st quarter of 2020: (in millions of US Dollars ($))
- Investment advisory, administration fees and securities lending revenue: 3,055
- Investment advisory performance fees: 239
- Technology services revenue: 274
- Distribution fees: 276
- Advisory and other revenue: 64
- Total Revenue of BlackRock: 3.710
BlackRock (NYSE: BLK) stock price history
The image below, obtained from Google, shows the stock price history of BlackRock over the last 5 years. And it's been a very good time for BlackRock stockholders. 5 years ago it was trading at $365 and its currently trading at around $458.99 a stock. That's a return of 25.7% provided to BlackRock stockholders over the last 5 years.
The stock of BlackRock is trading at close to the midpoint between its 52 week high and its 52 week low, which to us is a clear sign that the short term sentiment and momentum of BlackRock's stock is neutral at this point in time. This is not necessarily a bad thing as the sentiment of most listed stocks has been very negative in recent times due to the market sell offs we have seen triggered by the Coronavirus epidemic. Read more about the market sell off here.
The stock of BlackRock is trading at close to the midpoint between its 52 week high and its 52 week low, which to us is a clear sign that the short term sentiment and momentum of BlackRock's stock is neutral at this point in time. This is not necessarily a bad thing as the sentiment of most listed stocks has been very negative in recent times due to the market sell offs we have seen triggered by the Coronavirus epidemic. Read more about the market sell off here.
Recent coverage of BlackRock
The extract below discusses the latest regarding BlackRock as obtained from TheStreet.com
Investment manager BlackRock (BLK) on Thursday posted better-than-expected first-quarter earnings as investors rushed to fixed-income and cash-based ETFs and other non-equity investments, helping boost both net income and revenue. BlackRock said it earned $806 million, or $6.60 a share, down from $1.05 billion, or $6.61 a share a year earlier, but better than analysts’ forecasts of $6.36 a share. Revenue gained 11% to $3.71 billion from $3.35 billion a year ago, thanks to net quarterly inflows of $35 billion. Analysts polled by FactSet had been expecting revenue of $3.6 billion.
The numbers paint a picture of a firm taking in a wave of cash as the pandemic reached its full apex on financial markets, and then receded somewhat as investors adjusted to the extreme price-moves and volatility, shifting their asset mix accordingly.
Read the full article here
Investment manager BlackRock (BLK) on Thursday posted better-than-expected first-quarter earnings as investors rushed to fixed-income and cash-based ETFs and other non-equity investments, helping boost both net income and revenue. BlackRock said it earned $806 million, or $6.60 a share, down from $1.05 billion, or $6.61 a share a year earlier, but better than analysts’ forecasts of $6.36 a share. Revenue gained 11% to $3.71 billion from $3.35 billion a year ago, thanks to net quarterly inflows of $35 billion. Analysts polled by FactSet had been expecting revenue of $3.6 billion.
The numbers paint a picture of a firm taking in a wave of cash as the pandemic reached its full apex on financial markets, and then receded somewhat as investors adjusted to the extreme price-moves and volatility, shifting their asset mix accordingly.
Read the full article here
BlackRock (NYSE: BLK) latest stock valuation
So what is BlackRock stock worth based on the release of their latest earnings report? Based on BlackRock's latest earnings report provided our valuation model provides a target (full value) price at $459.90 a BlackRock stock (down slightly from our 4th quarter 2019 earnings report valuation of BlackRock). We therefore believe that the stock of BlackRock is overvalued.
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $459.90 Therefore we see a good entry point into BlackRock's stock at $413.90 or below. We expect the stock of BlackRock to pull back in coming weeks and months to levels closer to our target price (full value price)
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target (full value) price which in this case is $459.90 Therefore we see a good entry point into BlackRock's stock at $413.90 or below. We expect the stock of BlackRock to pull back in coming weeks and months to levels closer to our target price (full value price)
Next earnings release of BlackRock
It is expected that BlackRock will release their 2nd quarter 2020 earnings report in mid July 2020