BlackRock Stock Forecast | Is BlackRock a Good Stock to Buy? (2024)

BlackRock (BLK), the US-based global asset manager, was celebrating last November after its share price soared to record highs. It has since found life a bit tougher.

A challenging economic environment, including the war in Ukraine, has adversely affected the company’s revenues during 2022. The backdrop has resulted in BLK stock price falling almost 30% over the past 10 months. International uncertainty continues to cause headwinds.

But what does this mean for BlackRock? In our BLK stock forecastwe take a look at the firm’s recent results and analyse what could happen to its share price in 2022 and beyond.

What is BlackRock?

BlackRock is a leading US-based investment company based in New York City. It was founded back in 1988 with a staff of just eight people, and made its debut on the New York Stock Exchange (NYSE) a decade later.

As of September 2022, the asset manager has 70 offices in 30 countries and offers a wide range of investment solutions, including unit trusts, offshore funds and investments trusts.

It’s particularly well known among retail investors for its Exchanged Traded Funds (ETFs) that come under its iShares umbrella. According to BlackRock, its global roster of iShares ETFs is now in excess of 990 products, with more than $3.2tn in assets.

The firm’s initial public offering (IPO) took place on 1 October 1999 at $14-a-share. By the end of that year, the company had $165bn in assets under management (AUM). In September 2022, BlackRock was among the largest investment companies by market capitalisation.

Blackrock stock price history

As of 13 September, the BLK stock price was trading 62.5% higher than the $428.72 in September 2017. The company has generated trailing returns of 20% over the past three years, well ahead of the industry’s 9.01% figure, according to Morningstar.

However, it’s important to acknowledge this embraces quite a turbulent past year.

BLK stock reached an all-time high of $971 in November 2021, up 196% from March 2020 lows, amid wider bullish sentiment post-pandemic. Starting 2022 on a high, the trend quickly reversed, with the share price currently (13 September) trading 28% below that record high.

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This year has been very tough for many investors with most major stock markets in bear market territory by the halfway point in 2022, according to David Brett, investment specialist at Schroders.

“It has been a brutal year so far, the worst since the Great Depression nearly a century ago. Capital destruction, in other words the amount of money wiped off the value of investments, stands at more than $9tn globally, exceeding the financial crisis of 2008,” said Brett.

Revenues fall amid tough economic environment

In mid-July, 2022, BlackRock reported second-quarter figures that revealed a disappointing 6% decrease in year-over-year revenue. The asset manager attributed the downbeat results to “significantly lower markets” and dollar appreciation on average AUM and lower performance fees.

There was also a 14% fall in operating income year-over-year, along with a 21% decrease in diluted earnings per share (EPS).

However, BlackRock also highlighted $90bn of quarterly total net inflows, reflecting “continued strength” of the broad-based platform with positive flows across all product types and regions.

There was also a 5% increase in technology services revenue year-over-year due to continued strong client demand for Aladdin, its portfolio management software.

According to Laurence D. Fink, BlackRock’s chairman and chief executive, the first half of 2022 brought an investment environment that hadn’t been seen in decades.

“Investors are simultaneously navigating high inflation, rising rates and the worst start to the year for both stocks and bonds in half a century, with global equity and fixed income indexes down 20% and 10%, respectively,” he said.

He pointed out that the company had generated net inflows of $90bn in the second quarter, insisting this demonstrated its ability to deliver “industry-leading” organic growth in tough environments.

“Our connectivity with clients has never been stronger,” he added. “Over the last twelve months, we’ve delivered over $460bn of net inflows reflecting 5% organic base fee growth.”

BlackRock’s Fink said that there had been “numerous periods of volatility and uncertainty” during the company’s 34 year history – and it had always come through stronger.

“It is during periods like these that we differentiate ourselves even more with clients and further deepen those relationships. I see more opportunities for BlackRock today than ever before and remain confident in our ability to deliver long-term growth for our clients, shareholders and employees.”

BlackRock stock outlook from analysts

So, what are the BlackRock stock predictionsfrom analysts? Gregory Warren, sector strategist at Morningstar, gave a fair value price of $850 on the stock, 22% higher than its $696.81 closing price on 12 September 2022.

In a note, the analyst pointed out that BlackRock was the “largest asset manager in the world”, with $8.48tn in assets under management at the end of June 2022.

“Product mix is fairly diverse, with 51% of the firm's managed assets in equity strategies, 29% in fixed income, 8% in multi-asset class, 9% in money market funds, and 3% in alternatives,” it stated.

Danni Hewson, financial analyst at AJ Bell, wasn’t surprised that BlackRock has found this year significantly tougher to navigate than 2021.

“It’s been buffeted by the same headwinds that have ripped through global markets and despite cooling inflation there is still the expectation that volatility is here to stay for the rest of the year at least,” she told Capital.com.

However, she’s more optimistic about the long-term and pointed out that the ageing population suggests there will be plenty of interest in BlackRock over the coming years.

“More and more people are thinking about long-term incomes and BlackRock’s stance of ESG investing has captured the attention of many younger investors too,” she said.

“Although the consensus is revenue will be down this year, the outlook is positive and some investors will see recent downturns as a buying opportunity.”

BlackRock stock forecast: Where next for the shares?

What is the BlackRock stock forecastfor 2022 and beyond, and where do analysts and industry observers expect the shares to go over the longer term?

BLK stock was rated a ‘moderate buy’, according to the views of 12 analysts compiled by MarketBeat, as of 12 September. As far as a BLK stock forecastwas concerned, eight analysts had ‘buy’ recommendations and four rated it ‘hold’.

The overall consensus view on a BlackRock stock forecast was for shares to rise 15.45% to $804.46 in the next 12 months. The most optimistic suggested it could break $1,000-a-share, while the most pessimistic BlackRock share price forecast predicted that the stock could rise slightly to $675.

According to 10 analyst ratings compiled by TipRanks, as of 12 September, the stock was a ‘strong buy’, with an average price target of $715.40. This represented a potential upside of 2.67%. The site also revealed that 93% of bloggers were bullish on the stock, which was ahead of the sector average.

According to the algorithm-based pierce predictions of Wallet Investor, as of 12 September, the site’s BlackRock stock forecast for 2025suggested shares could hit $1,036.24 by September 2025.

Note that analysts’ predictions can be wrong. BlackRock stock forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before trading. And never invest or trade money you cannot afford to lose.

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