BlackRock (BX) stock price analysis and earnings preview

BlackRock (NYSE: BLK) stock price has underperformed the market this year even as American equities have jumped to their record highs. The stock has retreated by 3.47% while the S&P 500 and the Nasdaq 100 indices have jumped by almost 10%.

BlackRock has emerged to be one of the top American companies in the past few decades. It is the biggest asset manager in the world with $10 trillion in assets under management (AUM). Together with the likes of Vanguard, Fidelity, and State Street, it is the biggest holder of companies globally.

BlackRock is an all-weather company that makes money in all market conditions. For example, its annual revenue jumped to over $16 billion in 2020 up from $14.5 billion a year earlier.

It has continued growing, pushing its annual revenue to over $17 billion in 2023. At the same time, the company’s profits have jumped from $4.4 billion in 2019 to over $5.5 billion in 2023.

It is an all-weather company because of how it makes money. For example, it takes a tiny fee for its ETF business. Whenever you buy the iShares Bitcoin ETF (IBIT), the company takes 0.25%. As such, the company has benefited from the ongoing transition to passive funds.

BlackRock is also seeking to grow its business in other areas. In January, the company made a blockbuster deal to acquire Global Infrastructure Partners (GIP), a leading owner of infrastructure assets. 

It aims to become a leading player in this sector, which analysts expect will keep growing in the next few years. Its infrastructure division will have over $150 billion in assets.

BlackRock will be in the spotlight on Friday when it will publish its quarterly results. Data by SeekingAlpha shows that analysts expect that its revenue stood at $4.71 billion in Q1, up from the previous quarter’s $4.6 billion. It had over $4.2 billion in the same quarter in 2023.

A separate dataset by Yahoo Finance estimates that the company made $4.6 billion in the last quarter. It also estimates that its second-quarter revenue will be $4.7 billion. Its earnings per share (EPS) is expected to be $9.32.

Traders will focus on the company’s asset growth during the quarter. The company added $96 billion in assets in the fourth quarter. In Q1, we saw the company launch IBIT, which now has almost $20 billion in assets. These funds offset the withdrawal of $8.5 billion by Texas schools. Altogether, red states in the US have pulled assets worth over $13.3 billion.

BLK chart by TradingView

It is always hard to make a stock prediction before earnings. Historically, companies show heightened volatility when the results come out. Also, in the long term, BLK stock will likely continue doing well as its asset growth continues.

Now, on the daily chart, we see that the stock has crashed below the 50-day Exponential Moving Average (EMA). The Percentage Price Oscillator (PPO) has crossed the neutral point at 50. Also, the Percentage Price Oscillator (PPO) has moved below zero.

BlackRock has also moved to the lower side of the ascending channel. Therefore, the outlook for the stock is moderately bearish, if it moves below the ascending channel pattern. If this happens, the next level to watch will be $741, the highest swing in June last year.

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