BlackRock’s BLK shares closed the trading session at $992.04 on Friday, 8.5% below its 52-week high of $1,084.22 reached on Jan. 31, 2025.

In the past six months, BLK has gained 18.3%. In the same timeframe, the Zacks Investment Management industry and the S&P 500 Index rallied 27.1% and 13.5%, respectively. Also, the stock underperformed its peers – Apollo Global Management APO, Blackstone BX and Ares Management ARES.

Six-month Price Performance
 

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With nearly $600 billion in net new assets entrusted to BlackRock, 2024 marked a milestone year driven by strategic organic and inorganic initiatives. These efforts, centered on client needs, investment capability expansion, technology and scale, reinforced the company’s leadership in the industry. Let’s find out the major factor at play for BLK.

Key Factors Impacting BlackRock Stock

Acquisitions Driving Private Markets Push: BlackRock was on a buyout spree last year. In December 2024, this global asset manager signed an agreement to acquire HPS Investment Partners for about $12 billion in a third major deal to bolster its presence in private markets. In October, the company closed the acquisition of Global Infrastructure Partners (“GIP”), a leading global independent infrastructure manager. The deal was announced in January 2024. 

To complement the GIP deal, in June, BLK signed an agreement to acquire London-based Preqin, a premier provider of private markets data. In 2024, the company spent approximately $28 billion to strengthen its private markets offerings. 

These acquisitions represent a strategic expansion of BlackRock’s Aladdin technology business into the rapidly growing private markets data segment. Once the HPS Investment deal wraps up in mid-2025, the company is expected to manage almost $600 billion in private markets and alternative platform. Many of BlackRock's competitors in the alternative asset management business, like APO, BX and ARES, have made more significant strides.

By tapping into this lucrative market, BLK intends to unlock significant growth potential and provide unparalleled data and analytics solutions. The integration is expected to generate solid revenues as the company combines HPS Investment, Preqin and GIP data with its alternative asset management platform, eFront, which facilitates the creation, management and monitoring of alternative asset portfolios. The company anticipates HPS and Preqin, private markets and technology to make up more than 20% of its overall revenues on a pro forma basis.

In May, BlackRock acquired SpiderRock Advisors LLC, a leading provider of option overlay-based strategies for separately managed accounts (SMAs). This complements the Aperio acquisition, executed in 2021, further expanding the SMA offerings to fulfill unique client requirements.

Efforts to Strengthen iShares and ETF Operations: BlackRock’s broad product diversification, revenue mix and steadily improving assets under management (AUM) balance are expected to continue boosting the top line. The company’s inorganic growth strategy has also contributed to AUM's growth. AUM witnessed a five-year (2019-2024) CAGR of 9.2%. 

Over the same period, the company’s total revenues witnessed a CAGR of 7%. The uptrend will likely continue as the company’s efforts to strengthen the iShares unit (offering more than 1,400 ETFs globally) and ETF operations (it received approval for spot Bitcoin and ether ETFs) and increased focus on the active equity business are expected to offer support. In 2024, the company witnessed record net inflows of $641 billion, including industry-leading ETF net inflows of $390 billion. Of the record annual net inflows into ETFs, $41 billion was in its digital assets ETFs that were launched just last year.

Further, the Federal Reserve's interest rate cuts complement BlackRock’s organic growth strategy of raising its AUM through diversified offerings and a strong revenue mix.

Analyst Sentiments Bullish for BLK

Analysts seem to be bullish about BlackRock’s prospects. The company’s sales and earnings are expected to grow in the near term.

Sales Estimates

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Earnings Estimates

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Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

BlackRock Stock Trades at a Premium

Given the rally in BLK shares, it appears expensive relative to the industry. The stock is, at present, trading at the forward 12-month price/earnings (P/E) of 20.59X. This is above the industry’s 18.11X, reflecting a stretched valuation.

Price-to-Earnings F12M
 

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To Buy or Not to Buy BLK Shares Now?

Per BlackRock’s projections, the global private credit market is valued at almost $1.5 trillion currently and is expected to reach $4.5 trillion by 2030. Thus, the business is expected to be lucrative for the company.

Private Credit AUM by 2030 
 

Image Source: BlackRock Inc.

Further, BlackRock’s strong balance sheet, solid AUM balance, strategic expansion and collaborative efforts provide a strong foundation for growth. As the Fed lowers interest rates, it will reinforce the company’s efforts to improve its AUM through product diversification.

Additionally, BlackRock announced a 2.2% increase in its quarterly dividend to $5.21 per share in January. This marks the sixth hike in the last five years and represents an annualized growth of 8.8%. Further, the company intends to buy back $1.5 billion worth of shares this year. In 2024, it repurchased shares worth $1.6 billion. 

Nonetheless, investors should be cautious about BlackRock’s lofty valuation and keep an eye on how the company’s private markets bets pay off over time. BLK currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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