BLK - Embedded Expectations Analysis - 2020 04 28
BlackRock, Inc. (BLK:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 17.2x Uniform P/E, implying bearish expectations for the firm. Although management's concerns about iShares performance, COVID-19, and fixed income ETFs suggest the potential for near-term headwinds, given the firm's leadership position and liquidity, longer-term equity upside remains warranted for BLKSpecifically, management may be exaggerating the resiliency of iShares, and they may be concerned about market volatility during the COVID-19 pandemic. In addition, they may be exaggerating the number of investors turning to fixed income iShares and discretionary model portfolios during turbulent times, the market potential of fixed income ETFs, and the crisis preparedness of their Financial Markets Advisory. Furthermore, management may lack confidence in the BlackRock Investment Institute's ability to assist central bankers and regulators, and in their ability to sustain growth in their managed models and recoup fund outflows going forward. They may also be exaggerating the value of Aladdin and the strength of their alternative investment platform, and they may have concerns about fixed income ETF sell-offs and prime money market funds
Although management's concerns about iShares performance, COVID-19, and fixed income ETFs suggest the potential for near-term headwinds, given the firm's market leadership position and superior liquidity, market expectations are far too bearish, suggesting longer-term equity upside remains warranted for BL
BlackRock is an investment management firm. The company provides a range of investment and technology services to institutional and retail clients worldwide. Products are provided directly and through intermediaries in a variety of vehicles, including open-end and closed-end mutual funds, iShares? exchange-traded funds, separate accounts, collective investment trusts and other pooled investment vehicles. The company also provides technology services, including the investment and risk management technology platform, Aladdin?, Aladdin Wealth, eFront, Cachematrix and FutureAdvisor, as well as advisory services and solutions to a base of institutional and wealth management clients.
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