Gabelli Increases BLK Estimates

Gabelli is increasing its 2011 and 2012 adjusted earnings estimates on BlackRock, Inc. BLK to $12.75 and $14.95 per share from $11.70 and $13.70 per share, respectively, due to higher expected AUM and an improvement in operating margins. “Operating margins for 2010 were 39.3%, a 250 bps increase over 2009,” Gabelli writes. “The company should finish its technology integration from the BGI merger by the end of 2011, helping to increase operating margins further.” Additionally, Gabelli said that the firm is well positioned to increase AUM because of its position in the Exchange Traded Funds (ETF) and alternative markets. “iShares is the largest provider of ETF products with $570 billion in AUM out of the approximate $1 trillion industry assets,” Gabelli adds. “With $110 billion in alternative funds, BlackRock is an industry leader and has broad product offerings in funds of hedge funds, real estate and private equity.” BlackRock currently trades at $197.71.