After a strong fourth quarter earnings reported from BlackRock, Inc. (BLK) analysts at Nomura Securities increased its price target on the large investment management firm.
The analysts increased its price target on BLK from $231 to $255. This target suggests a +10% upside to Thursday’s closing price of $232.
Nomura analysts Glenn Schorr commented, “Who Said BlackRock Can’t Grow? In 4Q, BLK saw AUM rise 3% q/q to $3.8T, $47B of net LT flows (~5.5% organic growth), revenues up 9%, adj. margins expanded 190 bps to 42.6%, upped its dividend (~3% yield), and performance is strong. For the year, AUM grew 8%, margins were over 40%. The capital return story at BlackRock remains solid, as the company ended the year with a total payout of 104% including 9.1m of share buybacks. BLK does have some levers to keep the momentum going (investments in alternatives starting to pay off, fixed income ETFs are growing, turnaround in active equity, continued advisory growth, strong flows in retirement channel, and don’t forget ETF flows so far YTD). We like the stock as we believe the BlackRock story remains intact with strong positioning and legitimate growth drivers, good expense control (~40.4% 2012 adj. margins) and steady capital return. FY13E EPS from $15.61 to $16.05; FY14E EPS from $17.13 to $17.58.”
BlackRock shares were up $2.34, or +1.01%, during pre-market trading on Friday. The stock is up +24.35% over the past year.
The Bottom Line
We recently added Blackrock back on to our recommended list as the company reported solid results, coupled with a generous dividend boost. The company has a 2.90% dividend yield, based on the dividend hike and last night’s closing stock price of $232.00.
BlackRock, Inc. (BLK) is recommended at this time, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.