Shares of BlackRock (BLK) aren’t undervalued like they were a year ago. The stock’s gone from $180 to $280 in a year, while the P/E has risen from 14 to 18. This stock is no longer on sale, and I think we should wait for a price reduction before we get in.
One Year Chart
Profit growth was 34% last quarter (great) but Estimates don’t look so hot. I’d normally be more positive, but these estimates just fell by around 5% each. Profit growth the next four quarters is expected to average 10%. That’s good, not great.
Considering the stock has a P/E of 18, I don’t know if there’s gonna be enough momentum to push these shares much higher.
Fair Value
BLK is worth 19 tiems earnings. With a current 18 P/E, this stock is selling where it should. It’s no longer on sale.
Sharek’s Take
BlackRock is a solid mutual fund company that can be a core holding for almost any moderate growth portfolio. The stock was $180 a year ago and that was a great time to get in. It’s around $280 now and I think it needs time to digest this gain before moving higher. Look to get in around $240, which is 15 times earnings.
View the Earnings Table here. View the Profit History here.View the Ten Year Chart here.
