By Tomi Kilgore
BlackRock CEO Larry Fink indicates business in Asia is booming, brushing off any concerns that a large redemption by a single client could develop into a trend
Shares of BlackRock Inc. rallied Wednesday as Wall Street analysts basically brushed off investor concerns of a large client pulling more than $50 billion out of the investment-management giant.
The stock (BLK) bounced 3.5% higher Wednesday and was among the S&P 500 index’s SPX top 10 gainers. On Tuesday, the stock had dropped 5.9% after earnings were reported, to mark the biggest one-day post-earnings selloff in at least five years, according to available FactSet data going back to July 2020.
BlackRock, with more than $12.5 trillion in assets under management, had reported on Tuesday second-quarter profit that beat expectations by a wide margin and record first-half inflows into its iShares exchange-traded-fund business, even as revenue came up a bit light.
The stock slumped, as an issue for investors was that total quarterly net inflows of $68 billion, the lowest in five quarters, included a “single institutional client’s” $52 billion redemption.
BlackRock didn’t identify the client and didn’t provide any details other than that it was a “lower-fee index partial redemption,” primarily from fixed-income investments. J.P. Morgan analyst Kenneth Worthington noted that the client was in Asia.
The stock’s pullback occurred after it closed Monday at a record high of $1,111.46, and after it soared 36.3% since closing at a nine-month low of $815.72 on April 8.
Curiously, on the post-earnings call with analysts, not one analyst asked about the large single-client redemption, and it was only referenced once during the prepared remarks part of the call.
On Wednesday, J.P. Morgan’s Worthington noted the redemption but didn’t seem at all concerned.
“At this juncture, we do not sense any broader shift in BlackRock’s institutional and non-ETF index business but rather some client-specific activity that has impacted low-fee outflows,” Worthington wrote in a note to clients.
In fact, BlackRock Chief Executive Larry Fink indicated that business in Asia was booming.
“I actually was in Asia this past week and the opportunities we have with insurance companies, with wealth management across Asia and every other region is stronger than we ever imagined,” Fink said, according to an AlphaSense transcript.
Meanwhile, notes from BofA Securities analyst Craig Siegenthaler and Deutsche Bank’s Brian Bedell didn’t mention the single-client redemption, although Bedell said inflows of $68 billion were below his estimate of $74 billion.
J.P. Morgan’s Worthington raised his stock-price target to $1.093 from $1,018 and BofA’s Siegenthaler boosted his target to $1,224 from $1,214, while Deutsche Bank’s Bedell lowered his target to $1,165 from $1,195.
Overall, of the 20 analysts surveyed by FactSet who cover BlackRock’s stock, six raised their price targets after the earnings report, while five lowered them. There are 18 analysts who are bullish on the stock and the other two are neutral.
-Tomi Kilgore
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07-16-25 2053ET
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