BlackRock (BLK) PT Raised to $1,118 at Goldman Sachs

Goldman Sachs analyst Alexander Blostein raised the price target on BlackRock (NYSE: BLK) to $1,118.00 (from $1,040.00) while maintaining a Buy rating.

The analyst comments "Following 3Q24 results, we raise our 2024E-26E EPS estimates to $43.30/48.65/$55.11 from $41.57/$46.46/$52.97 on the back of the GIP acquisition closing and stronger margins (we would note that our estimates include the recent July debt raise associated with the proposed Preqin acquisition, but not any potential acquisition accretion). Following a couple years of sub-target organic base fee growth, BLK returned to 5% in 3Q24 amid record firm-wide inflows of $221bn. Supporting the strong organic growth, BLK's margin expanded meaningfully to 45.8% (up ~350bps y/y), which taken together we believe cleared the high bar coming into the quarter, as evidenced by today's stock outperformance. We come away from the quarter positive on BLK's prospects for 1) maintaining 5% organic base fee growth - and possibly higher in 4Q given seasonal tailwinds - as strong momentum in ETFs is complemented by healthy activity levels in the institutional channel and a host of new private markets initiatives set to kick off in 2025, and 2) continuing to generate positive operating leverage (assuming normal markets) as BLK's "financial rubric" takes place of "margin awareness". Collectively, the firm's operating income and EPS growth trajectory will be in the low-to-mid teens over the coming 1-2 years, supporting of an in-line to a modest-premium P/E vs. SPX. We revise our 12-month PT to $1,118 from $1,040, based on a 21X Q5-Q8 P/E."

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