Back to top

Image: Bigstock

Why Is BlackRock (BLK) Up 8.6% Since Last Earnings Report?

Read MoreHide Full Article

It has been about a month since the last earnings report for BlackRock (BLK - Free Report) . Shares have added about 8.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is BlackRock due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for BlackRock before we dive into how investors and analysts have reacted as of late.

BlackRock Q3 Earnings Beat on Y/Y Revenue & AUM Growth

BlackRock’s third-quarter 2026 adjusted earnings of $15.93 per share surpassed the Zacks Consensus Estimate of $13.97. The figure reflects a 38% rise from the year-ago quarter. 

Results benefited from higher revenues, record AUM balance and improved operating performance. However, higher expenses weighed on results.

Net income attributable to BlackRock (on a GAAP basis) was $1.66 billion, up 25% year over year.

Revenues Improve, Expenses Rise

Quarterly revenues (on a GAAP basis) were $7.75 billion, surpassing the Zacks Consensus Estimate of $7.46 billion. The figure increased 19% year over year. The improvement was driven by organic base fee growth, favorable market conditions, higher performance fees and increased technology services revenues.

Investment advisory, administration fees and securities lending revenues were $6.04 billion, up 20% year over year. The increase was primarily driven by organic base fee growth and the positive impact of market movements on average AUM. Securities lending revenues climbed to $253 million from $203 million a year ago.

Investment advisory performance fees increased 22% year over year to $630 million, primarily reflecting higher revenues from liquid alternative products. Technology services and subscription revenues rose 14% to $588 million, supported by continued demand for Aladdin and multi-product solutions. 

Distribution fees increased 17% to $414 million, while advisory and other revenues grew 9% to $84 million.

Total operating expenses amounted to $5.42 billion, up 19% year over year. The increase was primarily due to higher sales, asset and account expenses, employee compensation and benefits, and a rise in the fair value of contingent consideration related to prior acquisitions.

Adjusted Operating Income Grows

BlackRock's adjusted operating income was $3.33 billion, increasing 27% from the prior-year quarter. The adjusted operating margin expanded to 47.8% from 44.6% a year earlier, reflecting improved operating profitability.

Non-operating income (on a GAAP basis) was $316 million compared with $42 million in the prior-year quarter.

AUM Balance Climbs

As of Sept. 30, 2026, AUM was a record $15.49 trillion, up 15% year over year. The growth was driven by net inflows and favorable market movements over the trailing 12 months. The company recorded total net inflows of $205.47 billion in the reported quarter.

Average AUM was $15.46 trillion, rising 19% year over year. Equity AUM totaled $8.98 trillion, while fixed-income AUM was $3.35 trillion. Multi-asset AUM was $1.34 trillion, and alternatives AUM reached $466.28 billion. Cash management AUM was $1.10 trillion.

ETFs and Active Strategies Attract Inflows

BlackRock witnessed long-term net inflows of $174.81 billion in the reported quarter. ETFs contributed $134.51 billion in net inflows, led by fixed-income and equity products. Retail net inflows totaled $23.30 billion, while institutional clients contributed $17.01 billion.

Active investment strategies recorded net inflows of $66.41 billion, reflecting demand across the company's investment offerings. Private markets generated $15.31 billion in net inflows, including $7.58 billion from infrastructure and $5.01 billion from private credit. However, institutional index products witnessed net outflows of $27.44 billion.

Share Repurchases

BlackRock repurchased shares worth $550 million in the reported quarter.

Outlook

Management expects a mid-single-digit percentage increase in G&A expenses in 2026, after annualizing the impact of HPS and Preqin.

BlackRock has reiterated its sustainable long-term organic base fee growth expectation of 6-8%, with potential to reach high-single-digit to low-double-digit growth during periods of elevated client activity and favorable market conditions.

Management has a long-term target of low-to-mid-teens annual contract value (ACV) growth, supported by continued demand for technology offerings.

The company expects margin expansion potential, with recurring fee earnings margins potentially moving above 50% over the long term, supported by operating leverage and higher contributions from private markets and technology.

Management expects sustained organic growth, revenue diversification and operating leverage to support more consistent double-digit EPS growth over time.

Management expects an adjusted effective tax rate of approximately 25% for the fourth quarter of 2026.

BlackRock anticipates repurchasing at least $550 million worth of shares in the fourth quarter of this year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in fresh estimates.

VGM Scores

Currently, BlackRock has a average Growth Score of C, a score with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, BlackRock has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Published in