BlackRock Upgrading to Overweight - A Strong 2Q26 with More Operating Leverage Ahead; Strong Fundamental Outlook Provides Upside to Stock That Has Lagged

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BlackRock Upgrading to Overweight - A Strong 2Q26 with More Operating Leverage Ahead; Strong Fundamental Outlook Provides Upside to Stock That Has Lagged

%

Adj. EPS - 27E ($) 58.54 64.94 10.9%

considerably YTD (+2% vs. SPX +11%), despite earnings growth that continues

to remain robust. We think the BlackRock stock will catch-up to the solid Quarterly Forecasts (FYE Dec)

fundamental outlook, and expect outperformance from here. We increase our 2026 Adj. EPS ($)

and 2027 estimates (+6% / +11%), and increase our Dec-2026 price target to 2025A 2026E 2027E

$1,364. Q1 11.30 12.53A 16.07

Q2 12.05 13.91A 15.58

• 2Q26 delivers a revenue beat. BlackRock reported 2Q26 total revenue of Q3Q4 11.5513.16 14.5815.47 16.1517.14

$7.1bn, with total average AUM of $14.9tr, up +4% q/q and ending AUM of FY 48.05 56.50 64.94

$15.3tr. Overall base fees of $5.7bn (+5% q/q) were supported by strong

inflows, steady fee rates and higher overall AUM levels. 2Q26 performance Style Exposure

fees were $305mn, driven by key equity products. 2Q26 annualized effective

fee rates were flat q/q, and we are modeling mostly flattish fee rates ahead but

expect private markets fee rates to tick higher (given timing impacts in 2Q26).

• Organic base fees remain solid. Organic base fee growth was +8% in 2Q26,

steady from 1Q26 levels and indicate an average of +10% organic base fee

growth over the last four quarters. Here, we note that iShares has now delivered

five straight quarters of double-digit organic base fee growth and BlackRock’s

institutional channel delivered +9% LT organic base fee growth in the quarter

(active products and alternatives). We continue to expect a supportive

backdrop for heightened organic base fee growth ahead. We recently launched our industry

publication to help investors stay current