Why BlackRock Fell Today

Core Insights - BlackRock's shares fell 5.4% following a mixed earnings report, with earnings beating expectations but revenue missing [1][2] - The company reported a revenue growth of 12.7% to $5.42 billion and adjusted earnings per share growth of 16.3% to $12.05, but the revenue figure fell short of Wall Street expectations [2] - A significant redemption of $52 billion from a single institutional client impacted revenue, leading to lower-than-expected net inflows of $68 billion, although profit growth remained strong due to the nature of the redeemed assets [3] Financial Performance - Revenue increased by 12.7% to $5.42 billion in the second quarter, while adjusted non-GAAP earnings per share rose by 16.3% to $12.05, exceeding expectations by $1.23 [2] - The revenue miss was attributed to a large redemption from a low-fee index client, but the company maintained strong profit growth despite this [3] Market Reaction - The decline in BlackRock's stock price is attributed to profit-taking after a nearly 40% recovery since April's lows, with shares trading at around 27 times earnings and a dividend yield just under 2% [5] - The current valuation is considered not overly expensive for a high-quality growth company, but not particularly cheap for a financial stock [6] Strategic Developments - BlackRock's acquisition of Global Infrastructure Partners for $12.5 billion, which closed in October 2024, is expected to contribute to future growth [3]