BlackRock is the world's largest investment management firm, offering a wide array of products, including equity, fixed income, multi-asset, and alternatives. Roughly one-quarter of BlackRock's assets under management are actively managed, with the rest in passive index funds or iShares branded ETFs. BlackRock also generates revenue from its Technology and Risk Management business that is comprised of its proprietary risk management platform Aladdin and other digital offerings.

Assets Under Management ($10,645B as of 6/30/2024):


We see accelerating momentum across BLK's business with a pipeline of mandate that's larger and broader than ever across investment mgmt and technology spanning client channels and geographies. This should support accelerating organic asset growth while the upcoming GIP acquisition will further help expand organic base fee growth. We believe BLK's breadth of capabilities, unrivaled distribution prowess and top brand uniquely position the firm to capture key growth zones (e.g., ETFs, fixed income, private markets, emerging market clients, solutions and Aladdin technology). Further we see strong operating leverage that supports opt margin expansion. Combined, we expect this to drive better earnings than the market expects.


Price Target:

We arrive at a $972/share price target for Blackrock to achieve by the end of 2024, which reflects a 21x target multiple on '25 estimated earnings of $46.30/share. This multiple is in line with the S&P currently trading at ~21x '25 P/E; this implies an attractive entry point given expectations for earnings growth (BLK +16% vs S&P +11.5% CAGR across '24-26), higher margin profile, significant free cash flow conversion of earnings, substantial capital return, and high quality compounding franchise. We also note that since July 2023, estimates for Blackrock's 2025 earnings haven't moved up. We expect analysts to revise estimates up given the coming easing of financial conditions.