BlackRock (NYSE: BLK) shares were falling in premarket trading on Friday, July 15, as the company announced its latest earnings report.
According to the release, the operating income fell by 14% year-on-year (YoY) as the firm faced the “worst start to the year for both stocks and bonds in half a century,” Chairman and CEO Larry Fink said.
Meanwhile, the revenue reported was $4.53 billion, a decrease of -6% YoY, primarily driven by the impact of significantly lower markets and dollar appreciation. Similarly, earnings per share totaled $7.36, missing estimates by $0.66, while total assets under management were $8.49 trillion compared to $9.57 trillion on March 31, 2022.
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Quarterly inflows totaled $90 billion compared to $86 billion of inflows in the previous quarter. Further, the conference call is scheduled for 8:30 AM ET, which could further move the shares depending on other details.
BLK chart and analysis
Year-to-date (YTD), the stock is down 35.44%, continuing the negative sentiment from November 2021, when the stock started to lose momentum. Considerably lower volume is noted in the last few trading sessions.
Chart analysis points to a possible support zone ranging from $582.25 to $584.04, as well as a possible resistance line at $591.86. With the earnings release, more volatility could be expected, possibly testing the support levels.
In addition, analysts agree that the stock is a strong buy, with average price predictions for the next 12 months at $724.57, 23.09% higher than the current trading price of $588.63.
Pullbacks in the pandemic era stimulus along with rising rate hikes have hit investors’ sentiments, and it seems as if risk trades are on the decline, which often includes stocks. However, the stimulus and boom in the markets seen last year have set a high bar for companies, which they could have hardly topped.
It is important to point out that BlackRock also repurchased its own shares during the quarter for a total value of $500 million, which might be detrimental to the company in the near term if the price continues to decline as a result of an earnings shortfall.
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