Earnings Calendar (07Apr25)
Earnings for the week starting 07Apr25
I am interested in BlackRock, Delta, Morgan Stanley, JP Morgan, Wells Fargo, BNY and CarMax.
Let us look at BlackRock in detail.
BlackRock’s stock price has shown a downtrend in the last few months. The stock price grew 5.5% from a year ago. Technical Analysis has a “Strong Sell” rating. Analysts Sentiment has a price target of $1153.20. This implies a price upside of 40.19%.
Here is an analysis of BlackRock’s recent performance.
Revenue
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Growth Trend: BlackRock's revenue has shown consistent growth, increasing from $11.401 billion in 2015 to $20.407 billion in 2024. The 10-year compound annual growth rate (CAGR) for revenue is 6.3%, reflecting steady expansion.
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Key Milestones: Revenue growth was strong in early years (e.g., 7.5% in 2016, 11.5% in 2020), with a slight decline of -0.1% in 2023, followed by a recovery of 14.3% in 2024. The growth trajectory has been relatively stable.
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Competitive Advantage: The consistent revenue growth underscores BlackRock’s dominant position in asset management, driven by its extensive range of investment products and global reach, catering to institutional and retail clients.
Operating Profit
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Growth Trend: Operating profit grew from $4.664 billion in 2015 to $7.538 billion in 2024. The operating margin has remained robust, peaking at 40.9% in 2015 and stabilizing around 36.9% in 2024.
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Operating Margin: The operating margin averaged around 35-40% over the decade, with minor fluctuations, indicating strong cost management and profitability.
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Competitive Advantage: The high and stable operating margin reflects BlackRock’s efficient business model, leveraging its scale and technology (e.g., Aladdin platform) to maintain profitability in the competitive asset management industry.
Earnings Per Share (EPS)
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Growth Trend: EPS increased significantly from $19.71 in 2015 to $42.01 in 2024. The 10-year EPS growth has been impressive, with a CAGR of 8.2%, including notable jumps like 58.4% in 2017 and 20.0% in 2021.
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Volatility: EPS growth has been positive in most years, with a rare decline of -11.1% in 2022, followed by a strong recovery of 15.1% in 2024.
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Competitive Advantage: The consistent EPS growth highlights BlackRock’s ability to generate shareholder value, supported by its diversified revenue streams and strong market position.
Price-to-Earnings (P/E) Ratio
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Valuation: The P/E ratio stands at 21.6, suggesting that BlackRock is valued at a premium relative to its earnings, which is reasonable given its industry leadership and growth prospects.
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10-Year Median Returns: The 10-year median return on assets (ROA) is 2.8%, return on equity (ROE) is 14.0%, and return on invested capital (ROIC) is 11.0%, indicating solid historical returns.
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Competitive Advantage: The moderate P/E ratio, combined with strong ROE and ROIC, reflects BlackRock’s ability to efficiently utilize capital and generate value, supported by its scale and innovative technology.
Free Cash Flow (FCF)
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Growth Trend: The EV/FCF ratio is 28.8, and the 10-year CAGR for FCF is not explicitly provided but implied to be positive given the 10-year median FCF margin of 22.5%. Free cash flow has supported dividend payments and growth initiatives.
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Capital Structure: The median debt/equity ratio is 0.2, and debt/assets is 0.0, indicating a very low leverage position.
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Competitive Advantage: Strong FCF generation and minimal debt provide BlackRock with financial flexibility to invest in technology, acquisitions, and shareholder returns, a key strength in the asset management sector.
Overall Assessment
Over the past 10 years, BlackRock has demonstrated robust growth and stability, with revenue increasing at a 6.3% CAGR and EPS growing at an 8.2% CAGR. Operating margins have remained strong (around 36-40%), and the company has consistently raised dividends (8.9% CAGR), reflecting financial health and a shareholder-friendly approach. The P/E ratio of 21.6 and strong ROE (14.0% median) suggest a premium but justified valuation, supported by its leadership in asset management.
The high FCF generation, minimal debt (debt/equity of 0.2), and high gross margin (50.0% median) underscore BlackRock’s competitive advantages, including its technological innovation (e.g., Aladdin) and global scale. Despite a slight revenue dip in 2023, the 2024 recovery indicates resilience in a dynamic market.
The forecast of BlackRock’s earnings is 10.87 and 5.42B for its EPS and revenue, respectively. Though the P/E ratio stands at an attractive 21.6, I prefer to monitor the stock for now.
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