BlackRock, Inc. (NYSE:BLK) faces intense scrutiny when it reports its second-quarter earnings
The world’s largest asset manager, BlackRock (NYSE:BLK), faces intense scrutiny when it reports its second-quarter earnings tomorrow. Investors are concerned, and will want to know exactly how the company’s profitability is being affected by slowing growth and price wars.
Analysts aren’t upbeat about the near-term growth prospects for the New York-based firm. For the quarter that ended on June 30, BlackRock is likely to report almost flat sales and profit when compared to the same period a year ago, according to consensus forecasts. Profit may slide to $6.65 a share from $6.66 a year ago on sales of $3.58 billion.
BlackRock’s financial performance in recent quarters has been a mixed bag for investors. After reporting a decline in earnings last year, the company was still able to produce impressive rise in sales which increased 4.5% in 2018. But this year doesn’t look that promising. Sales fell 7% from a year ago in the first-quarter, despite the rising market.
BlackRock grew into a $6.5 trillion money manager during the bull market of the past decade, helped by its surging iShares ETF business. The ETF, or exchanged-traded funds, have been the engine of growth for BlackRock since the 2008 financial crisis, allowing it to more than double assets under management.
But that growth area is coming under threat as the company faces slowing net inflows and a price war that is pushing fees lower. Competition from both big and smaller players has pressured margins, according to Bloomberg data. Five years ago, BlackRock was making about $0.25 in revenue a year for every dollar that it managed. Last year, that figure fell to $0.23, and in the first-quarter, it fell further, to $0.21.
BlackRock, despite its wide moat and future growth potential, isn’t the kind of stock that one should buy when the markets have become vulnerable as a result of escalating risks to global growth. BlackRock’s shares now trade at almost 18 times forward 12-month earnings, down from 21 at the beginning of last year, suggesting investors are adjusting their expectations.
After the powerful rally of the past decade, in our view, its stock has seen the best in this bull market and in the short-run, it’s unlikely to be a bet that will pay off in a big way. Staying on the sidelines is a better strategy for this name.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 455.99.
The projected upper bound is: 488.43.
The projected lower bound is: 453.35.
The projected closing price is: 470.89.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 white candles.
A falling window occurred (where the bottom of the previous shadow is above the top of the current shadow). This usually implies a continuation of a bearish trend. There have been 6 falling windows in the last 50 candles–this makes the current falling window even more bearish. The two candles preceding the falling window were black, which makes this pattern even more bearish.
Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 50.3006. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 54.38. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 31 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -52. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 0 period(s) ago.
Rex Takasugi – TD Profile
BLACKROCK INC closed down -6.170 at 471.000. Volume was 2% above average (neutral) and Bollinger Bands were 34% narrower than normal.
Open High Low Close Volume___
475.000 475.140 468.160 471.000 128,339
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 476.82 453.53 430.39
Volatility: 17 25 31
Volume: 97,362 110,460 159,880
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
BLACKROCK INC gapped down today (bearish) on normal volume. Possibility of a Runaway Gap which usually signifies a continuation of the trend. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
BLACKROCK INC is currently 9.4% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into BLK.N (mildly bullish). Our trend forecasting oscillators are currently bullish on BLK.N and have had this outlook for the last 19 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.