Unfortunately, BLK did not meet market expectations and underperformed on Q2 EPS and revenue expectations. Estimize predicted the world’s largest asset manager to post EPS of $5.40 and Wall Street predicted $5.37; the actual was $5.24. However, Estimize and The Street were more in line regarding revenue. Both predicted $2.979B and $2.974B respectively and BLK announced at $2.965B, also a slight miss.
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Why did BLK come in so low? Chairman and CEO of BlackRock, Larry Fink commented that “While significant cash remains on the sidelines, investors have begun to put more of their assets to work”, suggesting the company lost out in Q2 as investors clenched onto their money, but that was starting to break up in the third quarter. BlackRock does offer some interesting investment opportunities moving forward, with their platform generating a record $94B of long-term net inflows during the quarter.
BlackRock’s Full-Year EPS is predicted to reach $27.42 within three years. While BLK presented an 11.6% return on equity this quarter, it underperformed the financial sector average of 12.6%. Revenues are expected to reach $15.66 Billion by 2020 and net income is slated to grow roughly 1.3x, according to analysts.
Despite an underwhelming quarter, BLK still looks promising for the future.
