BlackRock (BLK): Assessing Valuation After Recent Gains and Analyst Upside Narratives

BlackRock (BLK) shares have edged higher over the past month, rising more than 4%. Returns for the past 3 months stand at 7%. Investors are weighing solid performance figures against the current market landscape.

See our latest analysis for BlackRock.

After a steady climb in recent months, BlackRock’s share price is showing encouraging signs of momentum building, with a 1-year total shareholder return of nearly 25%. This highlights strong performance in both the short and long term. This growth comes as investors balance market shifts alongside the company’s solid fundamentals.

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But with shares performing so strongly, the question remains: is BlackRock’s current price still offering investors a bargain, or has the market already factored in its future growth prospects?

Most Popular Narrative: 3.6% Undervalued

BlackRock closed at $1,160.54, while the most widely followed narrative pegs its fair value slightly higher. This close gap calls for a closer look at how analysts are building their case for extra upside.

BlackRock's expansion into private markets through acquisitions like HPS Investment Partners, GIP, and ElmTree positions the company to capitalize on the secular shift of institutional assets into alternatives and infrastructure, driving higher-fee revenue streams and long-term earnings growth.

Read the complete narrative.

Ever wondered what earnings leap or margin shift could unlock this premium? The narrative's fair value is built on bold profit and revenue projections, as well as a projected future multiple that could reset expectations. Will these bullish assumptions stand up to reality? Dig deeper to uncover the forecasts behind the price.

Result: Fair Value of $1,203.69 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent fee compression or challenges integrating new acquisitions could threaten BlackRock’s margin improvements, which could set up fresh tests for the bullish thesis.

Find out about the key risks to this BlackRock narrative.

Another View: Multiples Suggest a Premium

While narrative-driven models point to upside, BlackRock’s price-to-earnings ratio tells a different story. At 28.1x, it is not only above the industry average of 26.2x, but also exceeds its fair ratio of 20.8x. This suggests the market is pricing in a premium, leaving less room for error if growth stalls. Could expectations be set too high?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out BlackRock for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own BlackRock Narrative

If you see things differently or want a deeper look under the hood, you have the tools to build your personal view using fresh data in just a few minutes. Do it your way

A great starting point for your BlackRock research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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