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Investment manager BlackRock (NYSE:BLK) extended gains for the seventh straight trading session as the markets expect the company to sustain its outperformance.
BLK surpassed its 52-week high during the course of the day to close 0.73% higher at $895.59.
A leader in the traditional asset management space and also a sizable player in the alternatives space, the stock has added 3.19% over the last six trading sessions, with a significant advance logged on Friday, August 23.
BLK ended the day 2.03% higher at $882.84 after Federal Reserve Chair Jerome Powell indicated in the prepared text of his speech at the Kansas City Fed’s Jackson Hole Economic Symposium that the Federal Open Market Committee will cut its policy rate at the September 17-18 meeting from its current level of 5.25%-5.50%.
BLK is currently trading 12% above its 200-day simple moving average and 4% up from its 20-day SMA.
Short interest stood at 1.04% of the total float as of August 15, representing 1.52M shares sold short.
The New York-based asset manager’s Q2 earnings and revenue climbed past Wall Street expectations as market gains increased its average assets under management and organic base fees grew.
For Q3, the consensus EPS estimate is $10.21 (-6.41% Y/Y) and the consensus revenue estimate is $4.99B (+10.33% Y/Y).
BlackRock is expected to sustain its relative outperformance, Barclays said in a note with an Overweight rating.
The investment firm considers BLK’s strong organic net inflows as well as its “brand recognition, breadth of offerings, scale, and ability to compete on price”.
The average sell-side analyst rating on the stock is Buy.
However, Seeking Alpha authors and the Quant Rating system grade BLK as Hold.
“BlackRock’s forward P/E ratio is higher than historical ratios as well as the mean of its competitor’s ratios, indicating that much of its future growth could be accounted for,” said SA contributor QOE Capital.
“Additionally, BlackRock has developed a reputation within the industry and is considered to lead the growth in the industry by consensus, suggesting that expectations are built in as well,” added QOE Capital.
Quant gives the stock a score of 3.26 out of 5, with a D- for Valuation, B for Growth, A for Profitability, C+ for Momentum and B- for Revisions.
