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Can BlackRock (BLK) Pull Off a Surprise in Q1 Earnings?
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BlackRock, Inc. (BLK - Free Report) is scheduled to report first-quarter 2017 results on Apr 19, before the opening bell.
This New York-based asset manager’s earnings surpassed the Zacks Consensus Estimate last quarter. Lower expenses and a rise in revenues primarily drove the results. An increase in assets under management (AUM) was another positive.
Shares of BlackRock gained nearly 7% in the last six months, thanks to the Trump rally. Investors also seem optimistic about the company’s near-term prospects. However, the company does not have a decent earnings surprise history, as is evident from the chart below:
Before getting into a detailed discussion on the factors that are likely to influence the results, let’s check what our quantitative model predicts.
According to our quantitative model, it is less likely that BlackRock will be able to beat the Zacks Consensus Estimate this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter)
Zacks ESP: The Earnings ESP for BlackRock is -0.40%. This is because the Most Accurate estimate of $4.93 is below the Zacks Consensus Estimate of $4.95.
Zacks Rank: BlackRock’s Zacks Rank #3 increases the predictive power of ESP. But we also need to have a positive Earnings ESP to be confident of an earnings beat.
Nevertheless, the Zacks Consensus Estimate for the current quarter inched up 0.4% in the last seven days. Also, the earnings estimate of $4.95 for the upcoming release indicates a year-over-year rise of nearly 16.5%.
Factors to Impact Q1 Results
BlackRock continues to dominate the ETF market with its brand initiatives. Moreover, driven by a rise in equity inflows in first-quarter 2017, the company’s U.S. iShares inflows remained strong. This might have positively impacted its assets under management in the quarter.
BlackRock’s price reduction for certain iShares core and fixed income might hurt revenues to some extent. However, the decline should get offset by the increase in the company’s market share. Also, the company’s continued focus on its iShares and ETF business might provide some support to the top line.
BlackRock witnessed rising expenses over the last few years. Moreover, management is of the opinion that because of its plans of restructuring its traditional actively managed equities business and improving product offerings, the company will have to incur $25 million charge as severance and compensation expenses to its exiting employees in the first quarter. Overall expenses might increase in the to-be-reported quarter.
Stocks Worth a Look
Here are a few finance stocks that you may want to consider, as they have the right combination of elements to post an earnings beat this quarter, according to our model.
Zions Bancorporation (ZION - Free Report) has an Earnings ESP of +1.85% and carries a Zacks Rank #3. The company is also slated to release results on Apr 24.
Lazard Ltd (LAZ - Free Report) is scheduled to release results on Apr 27. It has an Earnings ESP of +3.95% and carries a Zacks Rank #2.
Sell These Stocks Now
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>
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Can BlackRock (BLK) Pull Off a Surprise in Q1 Earnings?
BlackRock, Inc. (BLK - Free Report) is scheduled to report first-quarter 2017 results on Apr 19, before the opening bell.
This New York-based asset manager’s earnings surpassed the Zacks Consensus Estimate last quarter. Lower expenses and a rise in revenues primarily drove the results. An increase in assets under management (AUM) was another positive.
Shares of BlackRock gained nearly 7% in the last six months, thanks to the Trump rally. Investors also seem optimistic about the company’s near-term prospects. However, the company does not have a decent earnings surprise history, as is evident from the chart below:
BlackRock, Inc. Price and EPS Surprise
BlackRock, Inc. Price and EPS Surprise | BlackRock, Inc. Quote
Earnings Whispers
Before getting into a detailed discussion on the factors that are likely to influence the results, let’s check what our quantitative model predicts.
According to our quantitative model, it is less likely that BlackRock will be able to beat the Zacks Consensus Estimate this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #3 (Hold) or better for this to happen.
(You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter)
Zacks ESP: The Earnings ESP for BlackRock is -0.40%. This is because the Most Accurate estimate of $4.93 is below the Zacks Consensus Estimate of $4.95.
Zacks Rank: BlackRock’s Zacks Rank #3 increases the predictive power of ESP. But we also need to have a positive Earnings ESP to be confident of an earnings beat.
Nevertheless, the Zacks Consensus Estimate for the current quarter inched up 0.4% in the last seven days. Also, the earnings estimate of $4.95 for the upcoming release indicates a year-over-year rise of nearly 16.5%.
Factors to Impact Q1 Results
BlackRock continues to dominate the ETF market with its brand initiatives. Moreover, driven by a rise in equity inflows in first-quarter 2017, the company’s U.S. iShares inflows remained strong. This might have positively impacted its assets under management in the quarter.
BlackRock’s price reduction for certain iShares core and fixed income might hurt revenues to some extent. However, the decline should get offset by the increase in the company’s market share. Also, the company’s continued focus on its iShares and ETF business might provide some support to the top line.
BlackRock witnessed rising expenses over the last few years. Moreover, management is of the opinion that because of its plans of restructuring its traditional actively managed equities business and improving product offerings, the company will have to incur $25 million charge as severance and compensation expenses to its exiting employees in the first quarter. Overall expenses might increase in the to-be-reported quarter.
Stocks Worth a Look
Here are a few finance stocks that you may want to consider, as they have the right combination of elements to post an earnings beat this quarter, according to our model.
Ameriprise Financial, Inc. (AMP - Free Report) is slated to release results on Apr 24. It has an Earnings ESP of +0.79% and carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zions Bancorporation (ZION - Free Report) has an Earnings ESP of +1.85% and carries a Zacks Rank #3. The company is also slated to release results on Apr 24.
Lazard Ltd (LAZ - Free Report) is scheduled to release results on Apr 27. It has an Earnings ESP of +3.95% and carries a Zacks Rank #2.
Sell These Stocks Now
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500. See today's Zacks "Strong Sells" absolutely free >>