BlackRock Depicts Strong Revenue Growth; Expenses Mount - Analyst Blog

A generic image of a pen on a chart
Credit: Shutterstock photo

On Aug 20, 2014, we issued an updated research report on BlackRock Inc. ( BLK ). The rise in assets under management (AUM) and opportunistic acquisitions will likely continue to support its revenue growth. However, mounting expenses make us apprehensive.

BlackRock, with its diversified footprint across the globe and strong product mix has significant organic growth prospects. The company's top line has been growing at a 5-year CAGR of 20.7% (2009-2013), with the trend continuing into 2014.

We believe that BlackRock's diversified products and revenue mix will enable it to adapt easily to the changing needs of clients. Further, the company's brand initiatives for the iShares and ETF business will help it expand revenues going forward.

Further, the Zacks Consensus Estimate over the last 30 days has been showing an increasing trend. For 2014, the Zacks Consensus Estimate increased nearly 1% to $19.23 per share, while for 2015, it rose by a penny to $21.39 per share.

On the flip side, mounting operating expenses remain a major concern. BlackRock continues to witness higher expenses due to increased marketing costs as well as a rise in compliance costs. We believe that this would continue to hamper bottom-line growth going forward.

BlackRock now has a Zacks Rank #3 (Hold).

Stocks That Warrant a Look

Some better-ranked investment management stocks include AllianceBernstein Holding L.P. ( AB ), SEI Investments Co. ( SEIC ) and Cohen & Steers Inc. ( CNS ). All of these have a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

BLACKROCK INC (BLK): Free Stock Analysis Report

ALLIANCEBERNSTN (AB): Free Stock Analysis Report

COHEN&STRS INC (CNS): Free Stock Analysis Report

SEI INVESTMENTS (SEIC): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

Learn More