On Friday, Deutsche Bank (ETR:DBKGn) reaffirmed its Buy rating on BlackRock, Inc. (NYSE:BLK) with a steady price target of $936.00. The firm's analysis acknowledged a mix of results in BlackRock's first-quarter core performance.
Notably, the company exhibited strong cost control, achieving an adjusted operating margin of 42.2%, surpassing the analyst's projection of 41.1%. Performance fees also exceeded expectations, coming in at $204 million compared to the anticipated $116 million.
Despite these positives, BlackRock's base management fees fell short of estimates at $3.778 billion, with a fee rate slightly lower than expected at 14.9 basis points.
The average assets under management (AuM) for the quarter were reported at $10.177 trillion, marginally below the estimate of $10.251 trillion, and the ending AuM of $10.473 trillion also did not meet the forecasted $10.493 trillion.
Long-term net flows were a point of concern, totaling $76.4 billion, which was below both the analyst's forecast of $107.3 billion and the consensus of $84.6 billion. Equity and fixed income iShares, along with active fixed income and active equities, performed better than expected.
However, multi-asset flows and index equity outflows were not as favorable as anticipated. The long-term product organic growth rate stood at 3.3%, lower than both the analyst's and consensus expectations.
Additionally, cash management reported outflows of $19.2 billion, which was significantly higher than the forecasted $7.6 billion outflow. The analyst anticipates that the earnings call scheduled for 7:30 am will likely focus on the long-term product organic growth rate and management's strategy to reach a 5% growth pace, as well as the sustainability of BlackRock's cost control measures and further details on the pending GIP deal. It is suggested that the lighter organic growth may place some pressure on BlackRock's shares, pending further commentary from management.
InvestingPro Insights
BlackRock, Inc. (NYSE:BLK) has been a topic of interest following Deutsche Bank's reaffirmation of its Buy rating and a steady price target. Delving deeper into the financial health and market performance of BlackRock, InvestingPro data reveals a robust picture with a market capitalization of $116.92 billion and a steady dividend yield of 2.54%, reflecting the company's commitment to shareholder returns. In addition, the company has experienced a significant 27.91% price total return over the last six months, indicating strong market confidence.
InvestingPro Tips highlight BlackRock's consistent performance, with the company raising its dividend for 14 consecutive years and maintaining dividend payments for 22 consecutive years. This track record is a testament to BlackRock's financial stability and its ability to generate steady income for investors. Analysts have also revised their earnings upwards for the upcoming period, signaling potential growth ahead. For investors looking for more comprehensive analysis and additional InvestingPro Tips, there are 9 more tips available for BlackRock on InvestingPro's platform, which can be accessed with the use of the coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
These insights and additional tips could be particularly valuable for investors considering BlackRock's shares, especially in light of the company's recent performance and the upcoming earnings call that will shed more light on management's strategy and growth prospects.
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