Stock Analysis & Valuation BlackRock, Inc. (BLK.SW)

• Previous Close: CHF852.85
• Sector Valuation Confidence Level: High

Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	31.10	-96
Graham Formula	239.30	-72

Strategic Investment Analysis

Company Overview

BlackRock, Inc. (BLK.SW) is a global leader in investment management, risk management, and advisory services, serving institutional, intermediary, and individual investors worldwide. Founded in 1988 and headquartered in New York City, BlackRock operates across major financial hubs, including London, Hong Kong, and Sydney. The firm manages a diverse range of investment products, including mutual funds, ETFs, hedge funds, and alternative investments, spanning equities, fixed income, real estate, commodities, and multi-asset strategies. BlackRock's Aladdin platform, a sophisticated risk analytics and portfolio management tool, further strengthens its competitive edge in the financial services sector. With a market capitalization exceeding $64 billion, BlackRock is a dominant player in the investment banking and asset management industry, known for its scale, innovation, and client-centric approach. The company's extensive global footprint and strong brand recognition make it a preferred partner for pension funds, sovereign wealth funds, and corporations seeking tailored investment solutions.

Investment Summary

BlackRock presents a compelling investment case due to its dominant market position, diversified revenue streams, and strong financial performance. With $178.59 billion in revenue and $5.5 billion in net income for FY 2023, the company demonstrates robust profitability. Its ETF arm, iShares, is a market leader, benefiting from the growing trend toward passive investing. However, risks include exposure to market volatility (beta of 1.35), regulatory scrutiny in the asset management industry, and increasing competition from fintech disruptors. The firm's strong operating cash flow ($4.17 billion) and healthy dividend yield (approximately 2.8%) make it attractive for income-focused investors. Long-term growth prospects remain favorable, driven by global asset accumulation trends and BlackRock's technological leadership in Aladdin.

Competitive Analysis

BlackRock's competitive advantage stems from its unparalleled scale, brand recognition, and technological capabilities. As the world's largest asset manager, it benefits from significant economies of scale, allowing it to offer competitive fees while maintaining high margins. The iShares ETF platform dominates the global ETF market, giving BlackRock a first-mover advantage in passive investing. Its Aladdin platform provides a moat by integrating risk analytics, trading, and portfolio management tools, making it indispensable for institutional clients. BlackRock also excels in ESG investing, positioning itself as a leader in sustainable finance. However, the firm faces intensifying competition from low-cost passive fund providers like Vanguard and State Street, as well as active managers such as Fidelity. Additionally, fintech firms and robo-advisors are challenging traditional asset management models. BlackRock's global distribution network and strong relationships with institutional clients help mitigate these threats, but fee compression remains an industry-wide challenge. The company's ability to innovate—particularly in technology-driven solutions—will be critical to maintaining its leadership position.

Major Competitors

• Vanguard Group (VOO): Vanguard is BlackRock's biggest competitor in passive investing, known for its ultra-low-cost index funds and ETFs. While BlackRock leads in ETF assets under management (AUM), Vanguard's investor-owned structure allows it to offer lower fees, attracting cost-conscious investors. However, Vanguard lacks BlackRock's breadth of alternative investments and institutional risk management solutions like Aladdin.
• State Street Corporation (STT): State Street is a key competitor in ETFs (via SPDR) and institutional asset servicing. Its strength lies in custody banking and back-office services, but it trails BlackRock in AUM and global reach. State Street's SPDR Gold Shares (GLD) is a dominant commodity ETF, but its overall ETF lineup is narrower than iShares.
• Brookfield Asset Management (BAM): Brookfield competes with BlackRock in alternative investments, particularly real estate and infrastructure. While BlackRock has a more diversified product suite, Brookfield excels in direct private market investments. Its hands-on asset management approach contrasts with BlackRock's more passive strategies in alternatives.
• Blackstone Inc. (BX): Blackstone is a leader in private equity and real estate, areas where BlackRock has been expanding. Blackstone's strength lies in high-fee, high-margin alternative assets, but it lacks BlackRock's scale in traditional asset management and ETFs. BlackRock's more balanced business model provides steadier revenue streams.
• Invesco Ltd. (IVZ): Invesco is a mid-tier competitor with strengths in active management and ETFs (via its OppenheimerFunds acquisition). While smaller than BlackRock, Invesco has niche expertise in smart beta and factor-based investing. However, it struggles to match BlackRock's resources and global distribution network.
• T. Rowe Price Group (TROW): T. Rowe Price competes primarily in active equity and fixed income management. It has a strong reputation for fundamental research but has been slower to adopt passive strategies compared to BlackRock. Its smaller scale makes it more vulnerable to outflows during market downturns.