Banking & Finance

Earnings Previews: BlackRock, Citigroup, JPMorgan, Wells Fargo

The December-quarter earnings season goes into second gear Friday morning. Four of the country’s biggest banks are reporting results, and expectations overall are for results to be outstanding. Even better, higher interest rates could lead to even stronger results for the rest of this year.

So far this week, we have seen only a handful of noteworthy earnings reports, and the results have been mixed. We already have previewed three companies reporting this week: after markets close Wednesday, homebuilder KB Home reports fourth-quarter results, and before markets open Thursday we will hear from Delta Air Lines and Taiwan Semiconductor.

Here is a look at Friday morning’s top earnings reports.

BlackRock

The world’s largest investment management firm, BlackRock Inc. (NYSE: BLK) had nearly $9.5 trillion in assets under management at the end of the September quarter. Over the past 12 months, shares have added about 20%, including a drop of 13% in early October and an increase of more than 9% since. The company’s exchange-traded products recorded $3.1 trillion of inflows in 2021,1.7 times the record-setting inflows of 2020 and roughly equal to total inflows for the past two years combined.

Analysts remain bullish on the firm, with 11 of 14 giving the shares Buy or Strong Buy ratings and the rest rating the stock at Hold. At the recent share price of around $896.50, the upside potential on the shares based on a median price target of $1,035 is 15.4%. At the high price target of $1,141, the upside potential is 27.3%.

Fourth-quarter 2021 revenue is forecast at $5.12 billion, which would be up about 1.4% sequentially and more than 14% higher year over year. Adjusted earnings per share (EPS) are forecast at $10.07, down 8% sequentially and 1% lower year over year. For the full year, analysts are currently forecasting EPS of $38.78, up 14.7%, on sales of $19.4 billion, up 20%.

BlackRock stock trades at 23.1 times expected 2021 EPS, 21.1 times estimated 2022 earnings of $42.49 and 18.9 times estimated 2023 earnings of $47.34. The stock’s 52-week range is $670.28 to $973.16. BlackRock pays an annual dividend of $16.52 (yield of 1.86%). Total return to shareholders for the past 12 months is 17.6%.