Report
Valens Research

BLK - Embedded Expectations Analysis - 2021 02 22

BlackRock, Inc. (BLK:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 19.0x Uniform P/E. At these levels, the market has expectations for profitability to remain stable, but management may have concerns about ACV growth, the sustainability of net inflows, and the potential of their newly launched products

Specifically, management may lack confidence in their ability to sustain iShares and advisory net cash inflows and cultivate further organic base fee growth. In addition, they may have concerns about the impact of large client asset reallocation efforts, the possibility of asset allocation changes as interest rates rises, and the potential of their newly launched products. Furthermore, management may lack confidence in their ability to meet their long-term annual contract value (ACV) growth target, expand margins in 2021, and continue generating strong investment performance across asset classes
Underlying
BLACKROCK INC.

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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Valens Research
Valens Research

In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:

  • GAAP and IFRS have failed to provide rules for reliable financial statement reporting
  • Stock analyst recommendations are not grounded in disciplined financial analysis
  • Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
  • Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available

We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.

  • Corporate credit ratings remain years behind the fundamental underpinnings of company performance
  • Stock analysts continue to make recommendations with deeply inherent biases
  • Research firms have failed to break down the walls between credit, equity, and macroeconomic research
  • The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming

The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.

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Valens Research

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