Stock Watch: BlackRock (BLK) Seems Ready to Meet Short-Term Challenges


BlackRock, Inc. (NYSE:BLK), the world’s largest asset management company, has achieved significant growth over the years through measures such as technology-based risk management and strategic acquisitions. After expanding its wings to the United States, which accounts for the lion’s share of the business, the company is currently looking to expand into other geographies like Europe and Asia.

BLK is considered an expensive stock, but the company’s strong financial position and top performance justify its high valuation. The good news is that the price is at an all-time low now, after falling steadily since the start of the year. In what could be a sign of regaining momentum, the stock made modest gains this week but traded well below its November high. BlackRock has a habit of bouncing back from setbacks with extra vigor, a trait that has made it a favorite among the investing community.

Dividend power

The New York-based investment adviser’s track record of paying out dividends is equally impressive, with the yield hitting 3.4% after steady increases. Long-term and retired investors view it as a safe bet, as do most pundits who follow the stock. If their bullish recommendations and target price are any indication, BlackRock is a must-have stock. Interestingly, it is currently trading at a discount to the broader market.

BlackRock Q1 2022 Earnings Call Transcript

The company’s size and scale allow it to effectively overcome short-term challenges. iShares, a collection of exchange-traded funds managed by BlackRock, is the leader in this segment of the market with a share of more than 35%.

Second quarter results at your fingertips

BlackRock will release its second-quarter results on July 15 before the market opens, amid estimates of a 15% drop in net profit to $8.54 per share. Nevertheless, experts predict that revenue would remain broadly unchanged at $4.8 billion.

Excerpt from BlackRock’s second quarter 2022 earnings conference call:

“Our investments are closely aligned with our strategy to keep alpha at the heart of BlackRock, accelerate the growth of iShares, Private Markets and Aladdin, provide comprehensive portfolio advice and solutions to our clients and to be the global leader in sustainable investing. Our clients are trying to understand the implications of the rapidly changing investment environment. The Russian invasion of Ukraine marks the profound geopolitical shift that is accelerating a reassessment of investment chains. global supply.

Key numbers

In the March quarter, total revenue increased 7% from a year ago to $4.7 billion, resulting in adjusted earnings growth of 18% to 9.52 $ per share. Long-term net flows were $114 billion, reflecting positive flows across all product types, investment styles and geographies. Net income has exceeded estimates in every quarter for the past three years.

Although the worst appears to be over for BlackRock, in terms of stock market performance, it is unlikely to remain completely immune to the short-term uncertainties facing financial markets – with high inflation, rate hikes interest rates and recession fears that compound the problems. Further, the nature of BlackRock’s business is such that it is generally influenced by general market trends.

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BlackRock’s performance in the stock market has been in line with that of the broader market so far this year, marked by high volatility and a persistent bearish trend. BLK traded slightly above the $620 mark on Thursday, after opening the session higher.


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