Key Takeaways:
- The 2-Minute Valuation Model values BlackRock stock at $1,026 per share in 2 years.
- That’s a potential 15.5% upside from today’s price of $888.
- BlackRock’s normalized EPS is projected to grow 30.8% over the next three years.
- Wall Street analysts maintain predominantly positive ratings with price targets indicating double-digit upside.
- Get accurate financial data on over 100,000 global stocks for free on TIKR >>>
In a market where asset managers face challenges and opportunities, BlackRock (BLK) stands out as the world’s largest investment management firm with unparalleled scale and diversification.
As markets evolve with rising interest in passive investments, ETFs, and alternative assets, BlackRock’s dominance across investment categories positions it uniquely in the financial sector.
BlackRock manages approximately $10+ trillion in assets across equity, fixed income, cash management, alternative investments, and multi-asset strategies for institutional and retail clients worldwide.
The company’s technological edge through its Aladdin platform further reinforces its competitive moat in the industry.
With a projected annualized return of 7.5% over the next two years, BlackRock represents a relatively stable investment in the financial sector with modest growth potential.
Here’s our detailed valuation analysis.
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What is the 2-Minute Valuation Model?
Three core factors drive a stock’s long-term value:
- Revenue Growth: How big the business becomes.
- Margins: How much the business earns in profit.
- Multiple: How much investors are willing to pay for a business’s earnings.
Our 2-Minute Valuation Model uses a simple formula to value stocks:
Expected Normalized EPS * Forward P/E ratio = Expected Share Price
Revenue growth and margins drive a company’s long-term normalized earnings per share (EPS), and investors can use a stock’s long-term average P/E multiple to get an idea of how the market values a company.
Why BlackRock Could Be Undervalued
Forecast
The EPS growth chart shows that BlackRock is projected to experience solid earnings growth over the next few years.
The company’s normalized EPS is expected to increase from $43.61 in 2024 to $57.04 by 2027, representing a 30.8% growth.
Analysts’ year-over-year EPS growth rate expectations show an interesting pattern:
- 2.83% growth in 2025 (a temporary slowdown)
- 11.57% growth in 2026
- 14.00% growth in 2027
This earnings growth is likely to be driven by:
- ETF Market Dominance: BlackRock’s iShares platform continues to capture significant market share in the growing ETF industry, benefiting from the ongoing shift from active to passive investments.
- Technology Solutions: The Aladdin platform offers BlackRock a unique competitive advantage and recurring revenue stream beyond traditional asset management fees.
- Alternative Investments: BlackRock has been expanding its presence in higher-margin alternative asset classes, which should contribute positively to earnings growth.
- Scale Advantages: As the largest asset manager globally, BlackRock benefits from significant economies of scale, allowing it to offer competitive pricing while maintaining profitability.
View BlackRock’s full analyst estimates >>>
Valuation Multiple
BlackRock has historically traded at an average forward P/E multiple of 19.9x, as shown in the historical P/E chart. The stock has traded as high as 24.4x and as low as 14.8x, with a current P/E ratio of 19.8x.
The current P/E is almost exactly in line with its historical average, suggesting the stock is fairly valued based on historical trading patterns:
To maintain a conservative approach to our valuation, we’ll use a forward P/E multiple of 18x, slightly below the historical mean.
Fair Value
Using our 2-Minute Valuation Model and applying a conservative approach:
- Conservative 2027 EPS estimate: $57
- Conservative forward P/E multiple: 18x
Expected Normalized EPS ($57) * Forward P/E ratio (18x) = Expected Share Price ($1,026)
The 2-year expected share price we would get from this valuation is $1,026/share.
This presents a pretty low upside since the stock today trades at around $888/share.
The stock could have a 16% potential upside over the next 2 years, which would be nearly 8% annual returns:
Keep in mind, this is just a valuation exercise, and we don’t know for sure what the stock’s price will be in the future.
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Analysts’ Price Target
Today, analysts have an average price target of about $1,032/share for BLK stock, which means they also see about 16% upside for the stock:
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Risks to Consider
While our valuation and analysts’ price targets suggest that BLK stock is undervalued, investors should be aware of several risks:
- Fee compression in the asset management industry
- Market volatility affecting assets under management
- Increased regulatory scrutiny of large financial institutions
- Competition from both traditional asset managers and fintech disruptors
- Potential for market downturns that would impact revenue tied to assets under management
TIKR Takeaway
BlackRock presents a conservative investment opportunity for investors seeking exposure to the asset management industry.
With its dominant market position, technological edge, and diversified business model, the company appears well-positioned to deliver steady growth.
Our analysis suggests a potential 15.5% return over the next two years, translating to a respectable 7.5% annualized return.
Is BlackRock a buy over the next 24 months? Use TIKR to check the stock’s analyst price targets, growth forecasts, and see if the stock is undervalued today.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
