Is BlackRock stock a buy as shares spike after solid Q3 results?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Oct 13, 2021
  • BlackRock shares on Wednesday spiked 4.5% after announcing its most recent quarterly results.
  • The company reported its fiscal Q3 revenue and earnings before markets opened, beating analyst expectations.
  • However, net inflows and total assets under management were below Street estimates.

On Wednesday, BlackRock Inc. (NYSE:BLK) shares advanced 4.5% after reporting its most recent quarterly results. The company announced its fiscal third-quarter revenue and earnings pre-market, beating analyst expectations. However, BLK’s Q3 total assets under management and net inflows came in short of expectations.

BlackRock posted fiscal Q3 non-GAAP earnings per share of $10.95, beating the consensus Street estimate of $9.39. On the other hand, its GAAP EPS of $10.89 beat the average analyst estimate by $1.49, while revenue for the quarter increased by 15.6% to $5.05 billion, $230 million ahead of estimates.

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However, BlackRock’s net inflows of $97.97 billion missed the expectation of $102.46 billion, while the total AUM of $9.46 trillion also fell short of the $9.61 trillion the Street expected.

Should you bet on BLK’s growth?

From a valuation perspective, BlackRock shares trade at a reasonable forward P/E ratio of 19.42, making the stock attractive to value investors.

Moreover, analysts expect BLK’s earnings per share to increase by more than 12% this year before rising at an average annual rate of 16.67% over the next five years.

Therefore, growth investors could also find the stock as an attractive option for their portfolios.

Source – TradingView

Technically, BlackRock shares seem to have recently made an upward breakout from a descending channel formation in the intraday chart. However, the stock is still far from reaching overbought conditions whilst remaining below the 100-day moving average.

Therefore, investors could target extended gains at about $901.44, or higher at $930.30. On the other hand, if the stock pulls back following Wednesday’s sharp spike, it could find support at approximately $844.94, or lower at $817.27.

Is BlackRock still a buy?

In summary, although BlackRock shares spiked 4.5% after earnings, the stock is far from reaching overbought conditions. 

Moreover, BLK offers exciting growth prospects at attractive valuation multiples. Therefore, it may not be too late to buy BLK shares.

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