BlackRock, Inc. (BLK) reported 3rd-quarter results after the bell on Oct 19 that were better than expected, sending shares to a new 52-week high and within striking distance of the all-time high at $250.

Company Description

BlackRock, Inc. is an investment and asset management firm that works with both individual and institutional clients. The company was founded in 1988 and has a market cap of $31 billion.

Shares of BLK have posted huge gains over the last 6 months on the heels of a financial sector recovery and general economic optimism. The company’s recent 3rd-quarter results, reported on Oct 19, came in better than expected, sending shares to a new 52-week high above $240.

Third-Quarter Results

Sales were down 13% from last year to $1.14 billion, tempered by a 9% reduction in operating expenses. Earnings, however, came in better than expected at $2.10 per share, easily outpacing the Zacks Consensus Estimate of $1.87.

BlackRock noted that it benefitted from the stock market rally as investors shifted into riskier assets that enable the company to generate small fees. The company also added that its Assets Under Management (AUM) increased $61.6 billion to $1.435 trillion.

Estimates

Estimates were up going into the earnings release, but have yet to be adjusted based on the good quarter. As it stands, the current-year estimate is pegged at $6.38 per share, while the next-year estimate is projecting bullish 47% earnings growth at $9.40.

Valuation

Based on the current-year estimate, BlackRock has a P/E mutliple of 36X, a steep premium to the overall market, tempered a bit by the bullish next-year projection.

The Chart

Shares of BLK have more than doubled over the last 6 months after bottoming out just above $88 in early March. Take a look at the nice rally below.

Zacks Investment Research
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