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Category: Stock Market and BlackRock (BLK)
Date: 17 January 2021 Stock Price of BlackRock (BLK): $727.76 We take a look at the 4th quarter earnings report of their 2020 fiscal year of BlackRock the fiduciary firm that has approximately $8.67 trillion in assets under management on behalf of clients across the world. The group saw massive net inflows of $126.9 billion during the 4th quarter of their 2020 fiscal year.
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Laurence D. Fink, Chairman and CEO - The world faced unprecedented challenges in 2020 - many of which continue today. Through it all, BlackRock remained steadfast in meeting the needs of all our stakeholders. We stayed true to our purpose and used our voice and values to advocate on behalf of the institutions and individuals we help to meet their investment and savings goals"
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, 2020, the firm managed approximately $8.26 trillion in assets on behalf of investors worldwide
BlackRock office building
Overview of BlackRock's 4th quarter 2020 earnings report
Data below is reported for the latest quarter unless stated otherwise
- Revenue: $4.369 billion (up from $3.692 billion for the same quarter of the previous year)
- Revenue increased by 18.3% over the last 12 months
- Total expenses: $2.612 billion (up from $2.190 billion for the same quarter of the previous year)
- Total expenses increased by 19.3% over the last 12 months
- Some margin squeeze as revenue increased at a lot lower rate than their expenses
- Net income: $1.364 billion (up from 1.119 billion for the same quarter of the previous year)
- Diluted earnings per share: $8.87 (down from $7.15 for the same quarter of the previous year)
- PE ratio of BlackRock: 21.1
- Dividend declared for quarter: $3.63 (up from $3.30 for the same quarter of the previous year)
- Dividend yield of BlackRock: 2.36%
- Diluted weighted-average shares outstanding: 153.74 million (down from 155.173 million for the same quarter of the previous year)
- Average Assets under management by BlackRock: $7.808 trillion (up from $6.963 trillion for the same quarter of the previous year)
- Total net inflows for the quarter: $128.7 billion
BlackRock's management commentary on their 4th quarter 2020 earnings report
New York, January 14, 2021 – BlackRock, Inc. (NYSE: BLK) today reported financial results for the three months and year ended December 31, 2020.
- $391 billion of full year total net inflows, reflects 5% organic asset growth and 7% organic base fee growth, led by record flows in cash, active equity and alternatives and continued momentum in fixed income
- $127 billion of quarterly total net inflows, positive across investment style, product type and region, driven by strength in iShares® and active strategies 11% increase in full year revenue reflects strong organic growth, record performance fees and 17% growth in technology services revenue
- Increases in full year 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% growth in full year operating income (13% as adjusted)
- 12% increase in full year diluted EPS (19% as adjusted) also reflects higher nonoperating income and a lower diluted share count in the current year
- $3.8 billion returned to shareholders in 2020, including $1.5 billion of share repurchases
Revenue by product or service type for BlackRock for the 4th quarter of 2020: (in millions of US Dollars ($))
Laurence D. Fink, Chairman and CEO: “The world faced unprecedented challenges in 2020 - many of which continue today. Through it all, BlackRock remained steadfast in meeting the needs of all our stakeholders. We stayed true to our purpose and used our voice and values to advocate on behalf of the institutions and individuals we help to meet their investment and savings goals, and to be a positive force in the communities where we operate. “For decades, we’ve built our platform, strategy and culture around staying in front of clients’ needs, and this approach was proven out during 2020. BlackRock generated $391 billion of total net inflows and we ended the year with strong momentum, evidenced by a record 13% annualized organic base fee growth in the fourth quarter. In addition, our ability to deliver global insights, strategic advice and comprehensive solutions to clients, no matter the market environment, drove positive flows across every asset class, investment style and region. “Our strategic areas of investment flourished in 2020 as we saw record client demand for active equity, sustainable, cash and alternative investment strategies, generated $185 billion of net inflows into iShares ETFs and surpassed $1 billion in technology services revenue. BlackRock’s continued investment in building a multi-faceted investment platform with integrated technology, data and risk management, scale, global reach and interconnectivity enables us to deliver strong and consistent investment performance and more stable outcomes for our clients. “We begin 2021 well-positioned and intend to keep investing in our business to drive long-term growth and to lead the evolution of the asset management industry. In doing so, we remain committed to help millions of people build savings throughout their lives, make investing easier and more affordable, advance sustainable investing, and contribute to a more resilient economy that benefits more people.”
- Investment advisory, administration fees and securities lending revenue: 3393
- Investment advisory performance fees: 419
- Technology services revenue: 305
- Distribution fees: 314
- Advisory and other revenue: 47
- Total Revenue of BlackRock: 4.478
Laurence D. Fink, Chairman and CEO: “The world faced unprecedented challenges in 2020 - many of which continue today. Through it all, BlackRock remained steadfast in meeting the needs of all our stakeholders. We stayed true to our purpose and used our voice and values to advocate on behalf of the institutions and individuals we help to meet their investment and savings goals, and to be a positive force in the communities where we operate. “For decades, we’ve built our platform, strategy and culture around staying in front of clients’ needs, and this approach was proven out during 2020. BlackRock generated $391 billion of total net inflows and we ended the year with strong momentum, evidenced by a record 13% annualized organic base fee growth in the fourth quarter. In addition, our ability to deliver global insights, strategic advice and comprehensive solutions to clients, no matter the market environment, drove positive flows across every asset class, investment style and region. “Our strategic areas of investment flourished in 2020 as we saw record client demand for active equity, sustainable, cash and alternative investment strategies, generated $185 billion of net inflows into iShares ETFs and surpassed $1 billion in technology services revenue. BlackRock’s continued investment in building a multi-faceted investment platform with integrated technology, data and risk management, scale, global reach and interconnectivity enables us to deliver strong and consistent investment performance and more stable outcomes for our clients. “We begin 2021 well-positioned and intend to keep investing in our business to drive long-term growth and to lead the evolution of the asset management industry. In doing so, we remain committed to help millions of people build savings throughout their lives, make investing easier and more affordable, advance sustainable investing, and contribute to a more resilient economy that benefits more people.”
BlackRock (NYSE: BLK) stock price chart over the last 5 years
The image below shows the stock price history of BlackRock (BLK) over the last 5 years. And its been a good time for BlackRock stockholders with the stock increasing by 147.90% over the last 5 years. No investor would say no to those kind of returns.
The stock of BlackRock is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term 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 than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of BlackRock's stock is positive at this point in time.
BlackRock (NYSE: BLK) stock price history over the last 5 years.
BlackRock (BLK) stock vs Citigroup (C) vs JPMorgan Chase (JPM) over the last 5 years
The image below shows the stock price performance of BlackRock, Citigroup and JPMorgan Chase over the last 5 years. While all three are very large financial services providers their stock price trends and returns over the last 5 years are very different. The summary below shows the stock price returns provided by the three companies over the last 5 years:
- JPMorgan Chase: 159.9%
- BlackRock: 147.9%
- Citigroup: 87..9%
BlackRock (BLK) stock vs Citigroup (C) vs JPMorgan Chase (JPM) over the last 5 years
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 price (full value) price at $507.00 a BlackRock stock (up slightly from our 3rd quarter 20020 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 price (full value) price which in this case is $507. Therefore we see a good entry point into BlackRock's stock at $456.30 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) as the stock is overvalued at its current price. We rate the stock of BlackRock (BLK) as a sell
We usually suggest long term fundamental or value investors look to enter into a stock at least 10% below our target price (full value) price which in this case is $507. Therefore we see a good entry point into BlackRock's stock at $456.30 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) as the stock is overvalued at its current price. We rate the stock of BlackRock (BLK) as a sell
BlackRock Office in New York. Image obtained by Risk.net
Next earnings release of BlackRock
It is expected that BlackRock will release their 1st quarter 2021 earnings report in mid April 2021