BlackRock Stock Faces a Test: Can AUM Growth Offset Private Credit Worries?

BlackRock (NYSE:BLK) shares have slumped more than 8% from this year’s high as investors remain concerned about its private credit business. That weakness will be put to the test when the firm reports earnings on October 14.

BlackRock AUM Set to Grow Despite Private Credit Woes

BLK stock has been under pressure in the past few weeks, mirroring the performance of other companies in the private credit industry like Blue Owl, Apollo Global Management, KKR and Blackstone. 

While BlackRock is known for its ETF business, it is also a major player in the private credit industry. Its role in the sector grew in 2024 following its acquisition of HPS Investment Partners, which has over $197 billion in assets. 

HPS has faced major challenges in the past few months as stress in the private credit business has intensified. HPS has recently received substantial redemptions. For example, its HPS Corporate Lending Fund sought to redeem 11.5% of shares in the third quarter after pulling another 13.3% in Q2. 

On the positive side, other parts of BlackRock’s business are doing well. Its last earnings report showed that its assets under management jumped to $15.3 billion, with its second-quarter figure soaring by $192 billion.

The surge in assets pushed its revenue up by 31% from a year earlier. This increase was partly because of its HPS buyout deal and higher performance fees. Its operating income jumped by 42% during the quarter, with the share repurchases jumping to $550 million.

Analysts Have a Bullish Outlook for BLK Stock

Top analysts have a bullish outlook for BlackRock’s shares. Evercore’s Glenn Schorr has a target of $1,275, while Wells Fargo’s Michael Brown sees it rising to $1,230. Other analysts with a bullish outlook for the shares are UBS, Barclays, JPMorgan, and Morgan Stanley. The average estimate among analysts is $1,305, up by about 30% above the current level. 

These analysts believe that the company’s assets will continue growing in the next decade. If the current trend continues, it may hit the $20 trillion mark in late 2027 or early 2028. This growth will lead to higher revenues. 

The average estimate among analysts is that its upcoming earnings report will show that revenues jumped by 15.5% to $7.52 billion, with the annual figure rising by 20% to $30 billion. 

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