Blackrock's AUM reaches $10 trillion; Is the stock overextended?
AInvestMonday, Jul 15, 2024 12:07 pm ET
1min read
BLK --
MAXJ --

BlackRock reported a strong performance in its Q2 earnings, with earnings per share (EPS) of $10.36, surpassing analyst expectations of $9.96 by $0.40. However, revenues rose by 7.7% year-over-year to $4.8 billion, slightly below the consensus of $4.85 billion. This solid top-line performance was driven by consistent organic growth and positive market movements, which also contributed to the significant increase in assets under management (AUM).

Shares of BLK are holding gains despite being extended as it holds ground above the top end of its daily Bollinger Band ($832) and RSI hits 73. This may keep investors from chasing the stock higher.

The firm saw $139 billion in total net inflows during the first half of 2024, including $82 billion in the second quarter alone. This influx of funds was spread across various product types, showcasing the strength of BlackRock’s broad-based platform. Notably, BlackRock ETFs had a record start to the year, contributing significantly to the company's organic growth. This momentum helped drive a 3% organic base fee growth.

In terms of assets under management, BlackRock reached $10.6 trillion, up by $1.2 trillion year-over-year. The 8% increase in revenue year-over-year was primarily driven by the positive impact of markets on average AUM, organic base fee growth, and higher performance fees and technology services revenue. This robust performance resulted in a 12% increase in operating income and a 160 basis point expansion in margins.

CEO Laurence D. Fink highlighted the diverse growth opportunities BlackRock is executing on, including in private markets, Aladdin, and whole portfolio solutions across both ETFs and active investments. Fink emphasized BlackRock's longstanding relationships with corporates and governments, which differentiate it as a capital partner in private markets, driving unique deal flows for clients. The firm is also focused on transforming its private markets platform to bring more benefits of scale and technology to its clients.

Looking ahead, BlackRock is on pace to close its planned acquisition of Global Infrastructure Partners in the third quarter of 2024, which is expected to double private markets base fees and add approximately $100 billion of infrastructure AUM. Additionally, BlackRock announced its agreement to acquire Preqin, a leading private markets data provider, further enhancing its capabilities and value proposition for clients.

In summary, BlackRock’s Q2 performance was marked by significant net inflows, robust AUM growth, and solid financial results. The company continues to leverage its broad platform and strategic acquisitions to drive growth and deliver value for clients and shareholders. CEO Laurence D. Fink’s remarks underscore BlackRock’s commitment to innovation and evolving its offerings to meet client needs, positioning the firm for continued success and differentiated growth in the future.

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