Blackrock Stock: Is BLK Underperforming the Financial Sector?

Financial (names A - I) - Blackrock Inc_ logo and money background-by Poetra_ RH via Shutterstock

Based in New York, BlackRock, Inc. (BLK) is the largest public investment management firm offering a range of products, including single- and multi-asset portfolios in equities, fixed income, alternatives, and money market instruments. Valued at $114.4 billion by market cap, the company provides products directly and through intermediaries in various vehicles, such as mutual funds, exchange-traded funds, separate accounts, and collective trust funds. BlackRock also offers technology services, including Aladdin, Aladdin Wealth, eFront, and Cachematrix, as well as advisory services to institutional and wealth management clients.

Companies worth $10 billion or more are generally described as “large-cap stocks,” and BLK fits that description, signifying its substantial size, stability, and dominance in its industry. With 70 offices spanning 30 countries, BlackRock is a global powerhouse, blending global reach with local expertise. As the world's largest asset management firm, its extensive presence fortifies its leadership. Furthermore, BlackRock's advanced technology, like the Aladdin platform, empowers precise investment strategies through cutting-edge data and analytics.

But it's not sunshine and rainbows. The leading financial services firm’s shares have tumbled 8.9% from their 52-week high of $845, which they hit on March 8. Moreover, shares of BLK are down 6.8% over the past three months, lagging behind the broader US Financials iShares ETF’s (IYF) marginal decline over the same time frame.

In the long term, BLK shares have plummeted 5.2% in 2024 but have soared 11.7% over the past year. In contrast, the IYF is up 8.8% on a YTD basis and 25.3% over the past 52 weeks.

To confirm the bullish price trend, BLK has been trading above its 200-day moving average since mid-November.

Although BlackRock has lagged behind the broader market, its robust brand reputation for expertise, innovation, and commitment to responsible investing helps it retain and attract a wide range of clients, solidifying its position as a leading investment management firm. Moreover, its assets hit a record $10.5 trillion in Q1, and the firm reported a 36% increase in profit due to rising global equity markets boosting its investment advisory and administration fees. 

Despite the record, the market was not happy with BLK's Q1 earnings results reported on April 12. Shares of BlackRock dipped 2.9% and 1.8% in the subsequent two trading sessions despite reporting an adjusted EPS of $9.81, which topped Wall Street expectations by 4.1%. The company also posted revenue of $4.7 billion, almost in line with the forecasts.

Moreover, on May 28, BlackRock became the largest custodian of spot Bitcoin ETFs, surpassing Grayscale after its iShares Bitcoin Trust attracted $102 million in investor capital, bringing its total Bitcoin holdings to $20 billion.

BlackRock continues to outperform its rival Artisan Partners Asset Management Inc. (APAM). APAM’s stock has gained 5.8% over the past 52 weeks but declined 9.4% on a YTD basis.

Further, analysts remain optimistic about BLK’s prospects. The stock has a consensus rating of “Strong Buy” from the 16 analysts covering it, but the mean price target of $911.93 is an 18.5% premium to current levels.

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On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.