BlackRock Earnings: Solid Flows and Currency Gains Offset Somewhat by Market Losses

This analysis was originally published as a stock note by Morningstar Equity Research.

Key Morningstar Metrics for BlackRock

• Fair Value Estimate: $1100
• Morningstar Rating: ★★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

What We Thought of BlackRock’s Earnings

BlackRock ended March 2025 with a record $11.584 trillion in assets under management, or AUM, up 0.3% sequentially and 10.6% year over year. First-quarter revenue increased 11.6% year over year on higher average AUM and fee rates, with adjusted operating margins improving from 42.2% to 43.2%.

Why it matters: BlackRock continues to outstrip its peers from an organic AUM growth perspective, as its mix of passive products—index funds and ETFs—continue to appeal more to investors than most active product offerings. This allows the firm to better navigate market headwinds when they emerge, as they did during the first quarter.

• Net long-term inflows of $83 billion represented an annualized organic AUM growth rate of 3.1% for the first quarter, at the lower end of our annual target of 3%-5% but still better than what we are expecting from peers.
• The iShares platform remains the biggest driver of flows for BlackRock, with the firm picking up $107 billion in net long-term inflows, equivalent to a 10.2% annualized organic AUM growth rate, from its ETF business during the first quarter.

The bottom line: While BlackRock’s level of managed assets remains well above end of 2021 levels (just before the Federal Reserve started raising rates and the equity and credit markets tanked), in contrast with most of its peers, we expect the market selloff since the start of April to impact full-year results.

• There was little in wide-moat-rated BlackRock’s first-quarter results that would alter our long-term view of the firm. The company continues to trade at a hefty premium relative to the price/earnings multiples of the other US-based traditional asset managers (which we think is warranted).
• The shares are, however, modestly undervalued relative to our $1,100 per share fair value estimate, trading at around a 20% discount to our fair value estimate. We expect to stick with our more conservative near-term assumptions for BlackRock and the rest of the US-based asset managers.