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Category: Stock Market and BlackRock
Date: 16 January 2020 Stock Price: $530.26 We take a look at the 4th quarter earnings report of their 2019 fiscal year of BlackRock the fiduciary firm that has approximately $7.429 trillion in assets under management on behalf of clients across the world. The group saw massive net inflows for their 2019 fiscal year.
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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 4th quarter 2019 earnings report
Data below is reported for the latest quarter unless stated otherwise
- Revenue: $3.977 billion (up from $3.434 billion for the same quarter of the previous year)
- Revenue increased by 15.8% over the last 12 months
- Total expenses: $2.439 billion (up from $2.188 billion for the same quarter of the previous year)
- Total expenses increased by 11.47% over the last 12 months
- Net income: $1.301 billion (up from 927 million for the same quarter of the previous year)
- Diluted earnings per share: $8.29 (up from $5.78for the same quarter of the previous year)
- PE ratio of BlackRock: 18.65
- Dividend declared for quarter: $3.30 (up from $3.13 for the same quarter of the previous year)
- Dividend yield of BlackRock: 2.48%
- Diluted weighted-average shares outstanding: 157.459 million (down from 161.984 million for the same quarter of the previous year)
- Assets under management by BlackRock: $7.429 trillion (up from $5.975 trillion for the same quarter of the previous year)
- Total net inflows for the quarter: $129 billion
- Total net inflows for the full year: $429 which reflects 7% organic asset growth and 5% organic base fee growth
BlackRock's management commentary on their 4th quarter 2019 earnings report
New York, January 15, 2020 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three months and year ended December 31, 2019.
Laurence D. Fink, Chairman and CEO: “Today’s results reflect the systematic investments we’ve made to build broader and deeper client relationships and meet their evolving needs. Clients are increasingly looking to BlackRock as a strategic partner to deliver not just products, but broader thought leadership on macro and geopolitical issues and whole-portfolio solutions powered by technology. “BlackRock’s 2019 results confirm the uniqueness of our globally integrated, asset management and technology platform. We generated a record $429 billion of total net inflows in 2019, representing 7% organic asset and 5% organic base fee growth, and ended the year with strong momentum, capturing $129 billion of flows in the fourth quarter. Full year flows were positive across product type and investment style, including records in cash, factors and illiquid alternatives. Continued investment in Aladdin, including the acquisition of eFront, drove record growth in technology services revenue to almost $1 billion for the year. “The recently announced acceleration of our sustainability efforts is yet another example of BlackRock’s commitment to helping clients build more resilient portfolios and navigate investment opportunities and risks. We begin 2020 well positioned to continue fulfilling our purpose and leading the evolution of the asset management industry.”
- $429 billion of full year total net inflows, reflects 7% organic asset growth and 5% organic base fee growth, led by strong fixed income and cash flows and record activity in illiquid alternatives
- $129 billion of quarterly total net inflows, positive across investment style, product type and region, driven by $75 billion of iShares® inflows
- 2% increase in full year revenue driven by higher base fees and 24% growth in technology services revenue, reflecting continued Aladdin® momentum and the impact of the eFront acquisition
- 2% growth in full year operating income (0% as adjusted)
- 7% increase in full year diluted EPS (6% as adjusted) also reflects higher nonoperating income, partially offset by a higher effective tax rate in the current year
- $3.8 billion returned to shareholders in 2019, including $1.7 billion of share repurchases
Laurence D. Fink, Chairman and CEO: “Today’s results reflect the systematic investments we’ve made to build broader and deeper client relationships and meet their evolving needs. Clients are increasingly looking to BlackRock as a strategic partner to deliver not just products, but broader thought leadership on macro and geopolitical issues and whole-portfolio solutions powered by technology. “BlackRock’s 2019 results confirm the uniqueness of our globally integrated, asset management and technology platform. We generated a record $429 billion of total net inflows in 2019, representing 7% organic asset and 5% organic base fee growth, and ended the year with strong momentum, capturing $129 billion of flows in the fourth quarter. Full year flows were positive across product type and investment style, including records in cash, factors and illiquid alternatives. Continued investment in Aladdin, including the acquisition of eFront, drove record growth in technology services revenue to almost $1 billion for the year. “The recently announced acceleration of our sustainability efforts is yet another example of BlackRock’s commitment to helping clients build more resilient portfolios and navigate investment opportunities and risks. We begin 2020 well positioned to continue fulfilling our purpose and leading the evolution of the asset management industry.”
Revenue by product or service type for BlackRock for the 4th quarter of 2019: (in millions of US Dollars ($))
- Investment advisory, administration fees and securities lending revenue: 3,089
- Investment advisory performance fees: 239
- Technology services revenue: 274
- Distribution fees: 270
- Advisory and other revenue: 105
- Total Revenue of BlackRock: 3.977
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 $348 and its currently trading at around $530.26 a stock. That's a return of 52.3% provided to BlackRock stockholders over the last 5 years.
The stock of BlackRock is trading at closer to its 52 week high of $531.62 than it is to its 52 week low of $393.40, which to us is indication that sentiment and momentum of BlackRock's stock is positive at this point in time
The stock of BlackRock is trading at closer to its 52 week high of $531.62 than it is to its 52 week low of $393.40, which to us is indication that sentiment and momentum of BlackRock's stock is positive at this point in time
Recent coverage of BlackRock
The extract below discusses the latest regarding BlackRock as obtained from TheStreet.com
BlackRock (BLK) - Get Report reported fourth-quarter results that topped analyst estimates and the firm's total assets it manages climbed 25% to $7.43 trillion from $5.98 trillion a year earlier. The world's largest asset manager reported fourth-quarter earnings of $8.29 a share, up 43% from $5.98 a year earlier. The latest adjusted earnings were $8.34 a share. Analysts surveyed by FactSet were expecting the company to report $7.69 a share. Revenue reached $3.98 billion, up 16% from $3.43 billion. The FactSet estimate for the latest period: $3.84 billion.
BlackRock’s asset management and technology platform "generated a record $429 billion of total net inflows in 2019,” Chief Executive Larry Fink said in a statement. The firm’s iShares-branded ETFs took in $75.2 billion of new money, up from the $41.5 billion it brought in the third quarter. For the year, the company reported EPS rose 7% to $28..43 a share. The latest adjusted number was $28.48 a share. “Clients are increasingly looking to BlackRock as a strategic partner to deliver not just products, but broader thought leadership on macro and geopolitical issues and whole-portfolio solutions powered by technology,” Fink said.
Read the full article here
BlackRock (BLK) - Get Report reported fourth-quarter results that topped analyst estimates and the firm's total assets it manages climbed 25% to $7.43 trillion from $5.98 trillion a year earlier. The world's largest asset manager reported fourth-quarter earnings of $8.29 a share, up 43% from $5.98 a year earlier. The latest adjusted earnings were $8.34 a share. Analysts surveyed by FactSet were expecting the company to report $7.69 a share. Revenue reached $3.98 billion, up 16% from $3.43 billion. The FactSet estimate for the latest period: $3.84 billion.
BlackRock’s asset management and technology platform "generated a record $429 billion of total net inflows in 2019,” Chief Executive Larry Fink said in a statement. The firm’s iShares-branded ETFs took in $75.2 billion of new money, up from the $41.5 billion it brought in the third quarter. For the year, the company reported EPS rose 7% to $28..43 a share. The latest adjusted number was $28.48 a share. “Clients are increasingly looking to BlackRock as a strategic partner to deliver not just products, but broader thought leadership on macro and geopolitical issues and whole-portfolio solutions powered by technology,” Fink said.
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 $483.40 a BlackRock stock (up significantly from our 3rd 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 $483.40 Therefore we see a good entry point into BlackRock's stock at $435 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)
The current valuation of $483.40 is significantly higher than our valuation of BlackRock based on their 3rd quarter 2019 earnings in which we valued the stock of BlackRock at $443.10. This is largely due to the massive net inflows of the group and their strong stock repurchase program, both of these factors will lead to greater earnings per BlackRock share in future.
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 $483.40 Therefore we see a good entry point into BlackRock's stock at $435 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)
The current valuation of $483.40 is significantly higher than our valuation of BlackRock based on their 3rd quarter 2019 earnings in which we valued the stock of BlackRock at $443.10. This is largely due to the massive net inflows of the group and their strong stock repurchase program, both of these factors will lead to greater earnings per BlackRock share in future.
Next earnings release of BlackRock
It is expected that BlackRock will release their 1st quarter 2020 earnings report in mid April 2020