2Q26 Preview: Market Uplift Drives Upward Revisions

Research evidence excerpt

2Q26 Preview: Market Uplift Drives Upward Revisions

IdeaM

2Q26 Preview

2Q earnings kick off mid July starting with BLK on Wednesday, July 15. We revise our

2026-27 EPS estimates higher given uplift in financial markets in 2Q26 that supports

fund NAVs and boosts mgmt fee expectations. As a result, we raise 2Q EPS est by 7.5%

on average (now 7% above cons), and raise 2026/27 ests by +7%/10% on avg (now

+5%/8% ahead of cons). We remain selective in the traditional asset managers given

continued secular headwinds but have seen market uplift benefit the beta-sensitive

trads with the broader group up ~16% QTD, outperforming the rest of our coverage

that's down -2% QTD. Reiterate Overweight BLK given a more scaled and diversified

business model that should benefit the most if volatility continues to subside and

investors regain confidence and come off the sidelines.

Into the 2Q26 print, we focus on: 1) organic growth trends and flow outlook,

especially given scope for continued market uncertainty (listening for color around the

institutional pipeline, sales trends, new product launches, distribution initiatives, and

scope to improve organic growth profile); 2) ability to protect and expand operating

margins via expense efficiencies, idiosyncratic self-help initiatives, and strategic

partnerships to drive enhanced scale and productivity; and 3) capital management

priorities (including strategic M&A, debt paydown and capital return).

Tokenization and digital asset initiatives are also top of mind for us, and we're curious

to hear mgmt teams' views on the tokenization opportunity set as well as mgmt thoughts

regarding tokenization of funds and digital assets strategies more broadly. We're also

expecting updates around recently announced acquisitions (WT/Atlantic House