BlackRock shares close higher on Thursday, the company’s assets under management decrease 13% in Q1

BlackRock Inc’s (BLK) assets under management were reported to have decreased to $6.47 trillion during the first quarter from $7.43 trillion at the end of Q4 2019, as financial markets were roiled by concerns over the economic fallout of the coronavirus pandemic, while investors looked to de-risk.

BlackRock shares closed higher for the sixth time in the past ten trading sessions in New York on Thursday. It has also been the sharpest single-session gain since April 9th. The stock went up 3.59% ($15.92) to $458.99, after touching an intraday high at $462.35, or a price level not seen since April 14th ($467.00).

Shares of BlackRock Inc have retreated 8.70% so far in 2020 compared with a 13.35% loss for the benchmark index, S&P 500 (SPX).

In 2019, BlackRock Inc’s stock went up 27.97%, thus, it underperformed the S&P 500, which registered a 28.88% gain.

BlackRock’s net income shrank to $806 million ($5.15 per share) during the quarter ended on March 31st, from $1.05 billion ($6.61 per share) in the same period a year ago.

The company gathered $35 billion in new assets during the latest quarter, but however, this was mostly due to investors transitioning to cash amid risk aversion. BlackRock’s cash management business registered net inflows of more than $52 billion during the quarter.

“Eroding investor sentiment was a headwind to asset gathering this quarter,” Kyle Sanders, an analyst at financial services company Edward Jones, was quoted as saying by Reuters.

“Results were softer than usual, proving that even BlackRock isn’t immune to a market downturn,” the analyst added.

BlackRock’s technology services revenue rose 34% year-on-year to $274 million during the latest quarter, contributing to an 11% year-on-year growth of total revenue to $3.71 billion.

Analyst stock price forecast and recommendation

According to CNN Money, the 15 analysts, offering 12-month forecasts regarding BlackRock Inc’s stock price, have a median target of $515.00, with a high estimate of $552.00 and a low estimate of $386.00. The median estimate represents a 12.20% upside compared to the closing price of $458.99 on April 16th.

The same media also reported that at least 13 out of 17 surveyed investment analysts had rated BlackRock Inc’s stock as “Buy”, while 3 – as “Hold”.

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