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Why Wall Street Is Long on BlackRock Post-Rout


Feb. 27 2018, Updated 10:30 a.m. ET

Analysts’ views

Wall Street analysts are expecting a limited upside for asset managers (VFH) as well as broader indexes in 2018, largely due to heated valuations and expected corrections.

However, analysts are positive about the overall performances of asset managers owing to wealth creation and stable economic growth regarding concerns such as higher interest rates and a weakening dollar.

Among major asset managers, BlackRock (BLK) has 12 “buys” and “strong buys” from analysts as of February 2018 compared to 11 in December 2017. Three analysts have assigned “hold” ratings on the stock, and none have given it “sell” ratings.

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Analysts have given BlackRock a price target of $617.3 on a next-12-month basis. This estimate reflects an implied upside of 13.3% against its YTD (year-to-date) return of 6.1% in 2018 so far. The upside is mainly expected to come from continued inflows toward iShares, other retail offerings, and institutional investors.

Peers’ ratings

Among BlackRock’s peers, out of the 20 analysts covering State Street Advisors (STT), seven have assigned it “buys” and “strong buys” in February 2018. The remaining 13 have recommended “holds.”

Among banks, Bank of New York Mellon (BK) has received six “buys” and “strong buys” as of February 2018. Twelve analysts have recommended “holds” on the stock, and two analysts have given it an “underperform” rating.

For T. Rowe Price Group (TROW), four analysts have given it “buys” and “strong buys” as of February 2018, nine have called for “hold” ratings, and the remaining three have issued “underperform” ratings on the stock.


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