|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||69.88 - 70.48|
|52 Week Range||58.40 - 75.48|
|PE Ratio (TTM)||N/A|
|Expense Ratio (net)||0.10%|
JPMorgan Chase (JPM) reported an EPS (earnings per share) of $2.37 in 1Q18—compared to the consensus estimate of $2.28. The bank’s revenue came in at $28.52 billion—compared to the expectations of $27.68 billion. JPMorgan Chase reported a 7% decline in investment banking revenues to $1.6 billion. The bank’s return on equity stood at 15%.
BlackRock (BLK) stock has risen 13.3% over the past six months and 36.0% over the past year, reflecting a rise in the valuations of its holdings, strong inflows in its iShares and Institutional holdings, and the expansion of its Retail segment. BlackRock’s performance in 1Q18 and 2018 will depend on how the broader markets perform and the effects of policy changes, trade wars, and rates on inflows. BlackRock is currently trading at a forward PE (price-to-earnings ratio) of 16.4x compared to the industry average of 13.0x.
Wall Street analysts expect subdued returns for asset managers (VFH) in 1Q18 amid declining equities, weakness in tech stocks, rising interest rates, and trade war fears. The broader markets have fallen 2.2% over the past three months, reflecting a fall across sectors amid rate hikes and other major policy decisions.
The Trump administration has initiated what may become a trade war with China and its allies in order to push for domestic manufacturing, reduce its deficit, and bring duties on par with those of other countries. This has led to a further weakening of the US dollar, which began in 2H17 on expectations of a higher trade deficit due to lower tax rates. China is responding to the threat of a trade war with duties of up to 25% on American imports across various categories.
In March 2018, Boston Federal Reserve president Eric Rosengren delivered the keynote at the tenth conference organized by the International Research Forum on Monetary Policy. The discussion aimed to analyze if the US economy was equipped with the policy tools to combat a recession. Rosengren repeatedly cautioned the audience that he was not predicting a recession anytime soon, though wanted to highlight that it is the right time to prepare for any future slowdown.
The Senate recently passed a bill to loosen some of the more draconian regulatory restrictions placed on banks in response to a post-financial downturn environment, potentially giving financial stocks ...
New Federal Reserve Chairman Jerome Powell testified before Congress last week, stoking speculation the central bank could raise interest rates as many as four times this year. Some market participants ...
Wall Street analysts are expecting a limited upside for asset managers (VFH) as well as broader indexes in 2018, largely due to heated valuations and expected corrections. Among major asset managers, BlackRock (BLK) has 12 “buys” and “strong buys” from analysts as of February 2018 compared to 11 in December 2017. Analysts have given BlackRock a price target of $617.3 on a next-12-month basis.
The US stock market rout and withdrawals from debt funds in recent weeks have been the aftereffects of the indication of faster rate hikes by the Federal Reserve in its meeting in February 2018. The pace of withdrawals from equities and debt funds has led to a sudden change in investor confidence. Due to the implementation of lower tax rates, the fiscal deficit is expected to rise, resulting in a fall in the US dollar.
Investors are looking at alternative asset classes for deploying funds and also investing in equities in Japan and Europe amid weakening US equity performances. Among the major institutions, BlackRock (BLK) is expected to post EPS (earnings per share) of $6.42 in 1Q18 and $6.85 in 2Q18, compared to $5.25 and $5.24, respectively, in the prior year’s periods. Among BlackRock’s peers, the Bank of New York Mellon (BK) is expected to post EPS of $0.95 in 1Q18 and $1.0 in 2Q18. BK expects to see a sequential rise of $0.04 in its EPS, aided by growth in equity holdings, core banking operations, and investment banking growth.
The company has declared a quarterly dividend of $2.88 in 2018 compared to $2.50 in 4Q17, forming an annualized yield of 2.1%. Asset managers (VFH) have maintained dividend yields in the range of 1.5%–2.0% aided by a rise in broader markets, wealth generation, and fund flows toward new offerings. Asset managers could see relatively low returns on equity holdings in 1H18 due to the stock market rout as well as a shift in investments, a fall in the dollar index, and a higher fiscal deficit.
BlackRock (BLK) is targeting economies of scale amid higher technology investments and improved operating efficiencies. It has been successful in expanding its operating margin via the deployment of technology, platform investments, and lower administrative spending. BlackRock posted a margin of 44.8% in 4Q17, higher than its margin of 44.5% last year, aided by strong expense management and higher margins on various products.
Along with other sector exchange traded funds, the Financial Select Sector SPDR (NYSEArca: XLF), the largest financial services ETF, has pulled back in recent days, but many market observers maintain the ...
Oppenheimer Senior Analyst Chris Kotowski discusses the impact an increase in interest rates will have on loan growth and net interest margins and income growth.