An analyst raised the price target on BlackRock Monday, one day ahead of the firm's earnings report. The stock is near a buy point in a flat base.
Keefe Bruyette & Woods raised the price target to 1,300 from 1,215 and kept an outperform rating. BlackRock is a core holding among asset managers due to the firm's scale, diversified platform and leading growth and profitability metrics, TheFly.com reported.
Barclays and Morgan Stanley also raised their price targets in the past week.
BlackRock will announce third-quarter earnings Tuesday before the market opens.
Analysts' consensus earnings estimate is $11.30 a share, a dip of 1.4% year over year, according to FactSet. Revenue is expected to climb 20.7% to $6.271 billion. Analysts also expect average assets under management to rise to $12.2 trillion vs. $11.07 a year earlier. Net flows are seen rebounding to $171.9 billion.
Although the firm beat profit expectations in the first two quarters of this year, revenue narrowly missed FactSet estimates both times.
BlackRock-owned Global Infrastructure Partners is in talks to acquire utility group AES, according to reports. Investors will be watching the earnings report for any discussion about the possible deal.
More generally, bank executives' comments on the economy provide valuable insights and offer some color on investors' mood. The asset management firm owns the iShares family of ETFs, which had a record $152 billion in net inflows in the first half of this year.
Financials' Q3 Earnings
For the financial sector in general, the third quarter should feature positive results. Sector earnings per share are expected to climb 14.2%, according to LSEG. That's the third-best sector after technology and real estate and above the S&P 500's overall estimated increase of 8.8%. Revenue should grow 3.7%, the eighth most out of 11 S&P 500 sectors.
BlackRock stock rose above the 1,171.89 buy point of a flat base on Sept. 29 but has struggled to get airborne. Shares are slightly below the entry after finding support at the 50-day moving average in Friday's market sell-off. Watch for a move back above the buy point before considering a purchase of shares.
BlackRock stock has a 21-day average true range (ATR) of 1.94%. The average true range, available on IBD MarketSurge, gauges the characteristic breadth of a stock's behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves.
With the S&P 500 and Nasdaq still in a power trend, investors can buy stocks with ATRs up to 8%, though they should not be too concentrated in such stocks.
