BLK: Long-Term Net Inflows And Major Data Center Deal Will Drive Outperformance

Analysts have raised their price targets on BlackRock, with most now ranging from approximately $1,312 to $1,407. They cite the company’s strong Q3 results, robust net inflows, and enhanced long-term growth prospects.

Analyst Commentary

Following BlackRock's strong Q3 performance, analysts have been largely positive in their assessments, reflected in several increases to price targets across the industry. Their commentary highlights a number of key opportunities and risks impacting BlackRock's outlook.

• Bullish analysts point to the company's robust long-term net inflows, particularly from iShares ETFs and private markets, driving asset growth and fee income. This supports higher valuation multiples.
• BlackRock's execution on strategic acquisitions and partnerships, including the integration of HPS Investment Partners and participation in the landmark Aligned Data Centers deal, is perceived as a catalyst for future earnings growth and market leadership.
• Improved organic growth forecasts and a clear line of sight toward accelerated earnings power through 2030 reinforce confidence in the company's ability to outperform sector peers over the long term.
• Strong Q3 results and momentum heading into Q4, along with BlackRock's resilience in volatile equity, bond, and currency markets, have contributed to raised earnings and price target projections.

• Some analysts express caution about ongoing integration risks tied to recent acquisitions, which could impact near-term expense ratios or realization of targeted synergies.
• Heightened competition in both active and passive investing could narrow fee margins over time, presenting challenges to sustaining above-average growth rates.
• Macro uncertainties, including fluctuating global markets and interest rates, may affect client flows and asset levels. This could introduce volatility to earnings forecasts.
• A few note that, despite strong fundamentals, the stock’s significant recent appreciation may limit near-term upside, especially if the sector faces an unexpected downturn.

What's in the News

• BlackRock and ACS are nearing completion of a $26.8 billion data center partnership. This deal would see Global Infrastructure Partners taking a 50% stake in ACS Digital & Energy (Reuters).
• The White House is considering action to limit the influence of proxy advisory firms and restrict how index-fund managers, including BlackRock, can vote their shares (Wall Street Journal).
• BlackRock's Larry Fink was among Wall Street leaders invited to a Trump White House dinner. The Bank of America CEO was excluded amid ongoing tensions (New York Post).
• BlackRock and other lenders are seeking to recover over $500 million, accusing Bankim Brahmbhatt of fraud involving fabricated accounts receivable that were used as loan collateral (Wall Street Journal).
• BlackRock ETFs have made sizeable investments, exceeding $3 billion, in bonds issued by Hyperion, a major data center project primarily owned by Blue Owl Capital and Meta (Wall Street Journal).

Valuation Changes

• Fair Value remains unchanged at approximately $1,334 per share.
• Discount Rate has risen slightly from 8.26% to 8.35%.
• Revenue Growth projections are unchanged and hold steady at 11.1%.
• Net Profit Margin remains flat at 31.6%.
• Future P/E has increased modestly from 26.44x to 26.50x.