BlackRock’s stock (NYSE: BLK) has gained roughly 4% YTD as compared to the 17% rise in the S&P500 index over the same period. In sharp contrast, BlackRock’s peer State Street’s stock (NYSE: STT) is up 10% YTD. Overall, at its current price of $845 per share, BLK stock is trading 10% below its fair value of $938 – Trefis’ estimate for BlackRock’s valuation.
Amid the current financial backdrop, BLK stock has witnessed gains of 15% from levels of $720 in early January 2021 to around $845 now, vs. an increase of about 50% for the S&P 500 over this roughly 3-year period. However, the increase in BLK stock has been far from consistent. Returns for the stock were 27% in 2021, -23% in 2022, and 15% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 – indicating thatBLK underperformed the S&P in 2022 and 2023. In fact,consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the Financials sector including JPM, V, and MA, and even for the megacap stars GOOG, TSLA, and MSFT. In contrast, the TrefisHigh Quality (HQ) Portfolio, with a collection of 30 stocks, hasoutperformed the S&P 500 each year over the same period.Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident inHQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could BLK face a similar situation as it did in 2022 and 2023 andunderperform the S&P over the next 12 months – or will it see a strong jump?
The company posted mixed results in the second quarter of 2024, with earnings beating the consensus but revenues missing the mark. It posted total revenues of $4.81 billion – up 8% y-o-y, mainly driven by a 7% growth in the base fees (total investment advisory, administration fees & securities lending revenue), higher performance fees, and higher technology services revenue. Further, the average assets under management (AuM) increased 14% y-o-y to $10.46 trillion, thanks to consistent organic growth and positive market movements. On the cost side, the operating expenses as a % of revenues witnessed a favorable decrease, leading to an operating margin of 37.5% vs, 36.2%. Overall, the net income rose by 9% y-o-y to $1.5 billion.
The top line slightly decreased to $17.86 billion in FY 2023. It was due to a drop in distribution fees and base fees, more than offsetting the increase in technology services revenue. Further, total operating expenses as a % of revenues marginally increased in the year. However, it was more than offset by an improvement in the non-operating income from -$95 million to $880 million. Altogether, the adjusted net income grew 6% y-o-y to $5.5 billion.
Moving forward, we expect the same trend to continue in Q3 2024. Overall,BlackRock revenues are forecast to touch $20.04 billion in FY2024. Additionally, BLK’s adjusted net income margin is likely to see a slight drop in the year, resulting in an annual GAAP EPS of $40.18. This coupled with a P/E multiple of just above 23x will lead to a valuation of $938.
[1] Returns as of 7/24/2024
[2] Cumulative total returns since the end of 2016
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FAQs
Basic Info. S&P 500 12 Month Total Return is at 27.14%, compared to 22.15% last month and 15.94% last year.
What is the annualized growth rate of the S&P 500? ›
Basic Info. S&P 500 1 Year Return is at 25.31%, compared to 20.34% last month and 13.97% last year. This is higher than the long term average of 6.97%.
What is the 30 year growth of the S&P 500? ›
The average yearly return of the S&P 500 is 10.733% over the last 30 years, as of the end of July 2024. This assumes dividends are reinvested. Adjusted for inflation, the 30-year average stock market return (including dividends) is 7.998%.
Where will S&P be in 12 months? ›
Peering into the future of the S&P 500
Despite the historical overestimation, the average analyst estimate for the S&P 500 is a 7.6% increase 12 months from now. This prediction reflects the overall optimism about the U.S. economy's recovery and the expected performance of the various sectors that comprise the S&P 500.
What is the trailing 12-month growth rate? ›
TTM growth is a way to view a company's year-over-year growth. It's calculated by dividing the latest TTM numbers by the numbers in the preceding 12-month period.
What is the difference between trailing 12 months and last 12 months? ›
Last twelve months (LTM) refers to the timeframe of the immediately preceding 12 months. It is also commonly designated as trailing twelve months (TTM). LTM is often used in reference to a financial metric used to evaluate a company's performance, such as revenues or debt to equity (D/E).
What is the return of the S&P YTD in 2024? ›
So far in 2024 (YTD), the S&P 500 index has returned an average 19.09%.
What is the 5 year average return on the S&P 500? ›
S&P 500 5 Year Return (I:SP5005YR)
S&P 500 5 Year Return is at 93.01%, compared to 85.29% last month and 55.36% last year. This is higher than the long term average of 45.87%. The S&P 500 5 Year Return is the investment return received for a 5 year period, excluding dividends, when holding the S&P 500 index.
What are the 5 top performing US stocks for 2024 year to date? ›
Best S&P 500 stocks as of September 2024
| Company and ticker symbol | Performance in 2024 |
|---|
| General Electric (GE) | 71.2% |
| Targa Resources (TRGP) | 69.1% |
| Constellation Energy (CEG) | 68.3% |
| Eli Lilly (LLY) | 64.7% |
6 more rowsAverage S&P 500 Return for the Last 20 Years
Looking at the S&P 500 from 2003 to mid-2023 the picture changes. The average stock market return for the last 20 years was 9.75% (7.03% when adjusted for inflation), which is lower than the average 10% return.
Milestone highs
- August 18, 2020: The S&P 500 index closed at a record high of 3389.78 amid the ongoing COVID-19 pandemic in the United States.
- April 1, 2021: The S&P 500 index reaches 4,000 points, closing at 4,019.87.
- February 9, 2024: The S&P 500 index reaches 5,000 points, closing at 5,026.61.
For the 10 years ending in August 2024, the S&P 500 has outpaced the historical average a bit, returning an annual average of 12.9% with dividends, according to DQYDJ.
What is the S&P 500 expected to do in 2024? ›
Analysts project 11.5% earnings growth and 5.5% revenue growth for S&P 500 companies in 2024. Fortunately, analysts see positive earnings and revenue growth for all eleven market sectors this year.
What is the S&P 500 prediction for 2025? ›
"We continue to expect the US to enter a recession in late-2024 or early-2025." "We expect the S&P 500 to drop to 3750 in 2025 and the 10-year Treasury yield to fall to 3%," BCA adds.
Is a market crash coming in 2024? ›
While many experts are making predictions about whether the market will crash in 2024 or how severe the next downturn will be, it's impossible to say with certainty where stock prices will be in the short term. However, the market's long-term performance is all but guaranteed to be positive.
What is 12-month trailing total return? ›
It refers to the past 12 consecutive months of a company's financial performance. You calculate TTM figures with data from a company's quarterly reports, either taken directly from those reports or as reported by your favorite font of financial information.
What is the trailing 12-month rate? ›
Trailing 12-month (TTM) figures report metrics based on the last 12 months (or four quarters) to date on a rolling basis. In addition to measuring recent trends or annual performance, TTM financial metrics are frequently used to compare the relative performance of similar companies within an industry or sector.
What is the trailing 12-month yield? ›
TTM yield.
For a mutual fund or an exchange-traded fund (ETF), TTM yield is a measure of the percentage of income the security has returned to investors over the previous 12 months. For a fund, TTM yield is calculated by taking the weighted average of the yields that make up its portfolio of assets.
What is the trailing 12-month stock performance? ›
Trailing 12-month, or TTM, refers to the past 12 consecutive months of a company's performance data used for reporting financial figures. By consistently evaluating trailing 12-month numbers, company financials can be evaluated both internally and externally without regard for the artificiality of fiscal year-end.
