Investment management giant BlackRock reports quarterly earnings results Thursday morning. The company snapped its streak of eight consecutive quarters of earnings growth in Q2, and the declines continued for the third quarter. BLK stock rose by market close Thursday after initially falling following the report.
UBS analyst Brennan Hawken downgraded his rating for BLK stock to Neutral from Buy on Tuesday and lowered the price target to $585 from $700. Weakening bond markets pose a distinct headwind for BlackRock, as 61% of its active assets under management are fixed income, Hawken said in a research note. He expects inflows to slow to $440 billion next year from $540 billion in 2021, and says ESG and regulatory-related political risk have increased recently.
BlackRock lost over $1 billion in asset management business from Republican majority states resisting its green investing policies, the Financial Times reported Monday. CEO Larry Fink has pushed for companies to cut their carbon emissions and threatened to drop stragglers from actively-managed portfolios. However, the withdrawals hadn't affected its revenue as of last quarter.
BlackRock Earnings
Expectations: Analysts predict BlackRock's adjusted earnings will crumble 35.5% to $7.06 per share. Revenue is seen falling 16.8% to $4.2 billion.
Results: BlackRock's adjusted earnings fell 12.8% to $9.55 per share and revenue fell 15% to $4.3 billion.
The firm reported $17 billion in net inflows for the quarter while its total assets under management fell 16% to $7.96 trillion.
BLK Stock
BLK stock rose nearly 6.6% by the end of trading Thursday as the market indexes reversed early losses. Shares slid more than 2.2% in the first hour of trading following the earnings results. BlackRock stock is down more than 41% so far this year.
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