Earnings Previews: BlackRock, UnitedHealth

In mid-morning trading on Wednesday, the Dow was up 0.19%, the S&P 500 up 0.17% and the Nasdaq 0.04% higher. The March consumer price index report shaved another point from its year-over-year rate, from up 6% in February to up 5% last month. The numbers are raising hopes of an easing of the Federal Reserve’s rate hikes. The next Federal Open Market Committee meeting begins May 2.

No notable earnings reports were released after markets closed Tuesday or before they opened on Wednesday.

First thing Thursday morning, Delta Air Lines, Infosys and Progressive are expected to post their quarterly results. Then Citigroup, JPMorgan and Wells Fargo, three of the nation’s five largest banks, report quarterly results early Friday.

Here are previews of a Dow component and the world’s largest investment management firm. Both are reporting quarterly results along with the banks on Friday morning.

BlackRock

The world’s largest investment management firm, BlackRock Inc. (NYSE: BLK), reported assets under management totaling just over $10 trillion at the end of December 2022. That total was more than $500 billion higher than in December 2021. At the end of the December quarter, BlackRock reported $8.7 trillion in assets under management. When CEO Larry Fink released his annual letter, he talked about BlackRock’s fiduciary duty, and not so much about the ESG push the company had been making for the past two years. Dropping more than $1 trillion can do that.

Analysts remain bullish on the firm, with 11 of 17 having a Buy or Strong Buy rating and the rest rating the stock at Hold. At a recent share price of around $670.00, the upside potential based on a median price target of $771.00 is about 15.1%. At the high price target of $1,083.00, the upside potential is 61.6%.

First-quarter 2023 revenue is forecast at $4.24 billion, which would be down by 2.2% sequentially and 9.8% year over year. Adjusted earnings per share (EPS) are forecast at $7.70, down 13.8% sequentially and by 19.1% year over year. For the full fiscal year, analysts anticipate EPS of $34.67, down about 2.0%, on sales of $18.13 billion, up 1.4%.

BlackRock stock trades at 16.3 times expected 2023 EPS, 16.8 times estimated 2024 earnings of $39.77 and 14.7 times estimated 2025 earnings of $45.62. The stock’s 52-week trading range is $503.12 to $785.65. Blackrock pays an annual dividend of $20.00 (yield of 3.03%). Total return to shareholders for the past 12 months was negative 5.39%.

UnitedHealth

The country’s largest health insurer, UnitedHealth Group Inc. (NYSE: UNH), has posted a share price decrease of around 3.1% over the past 12 months. But shares of the Dow component have been sagging since early November of last year, falling by as much as 15% before recovering beginning mid-March, after UnitedHealth got a boost when the Justice Department dropped its challenge to the company’s acquisition of Change Healthcare. Earlier this week, the company added another physicians’ group to its health care network when it purchased New York’s Crystal Run Healthcare.

Analysts remain bullish on the stock, with 20 of 25 assigning a rating of Buy or Strong Buy and the other five rating the shares at Hold. At a price of around $521.00 a share, the upside potential based on a median price target of $596.00 is 12.1%. At the high target of $650.00, the upside potential is 24.8%.

ALSO READ: Why 7 of the Highest-Yielding ‘Strong Buy’ Health Care Stocks Are the Absolute Best 2023 Buys

The consensus estimate for first-quarter revenue is $89.76 billion, up 8.4% sequentially and by 12.0% year over year. Adjusted EPS are tabbed at $6.08, up 13.8% sequentially and 10.7% higher year over year. For the full 2023 fiscal year, analysts are forecasting EPS of $24.93, up 12.4%, on revenue of $359.68 billion, up 11%.

UnitedHealth stock trades at 20.9 times expected 2023 EPS, 18.4 times estimated 2024 earnings of $28.31 and 16.1 times estimated 2025 earnings of $32.29 per share. The stock’s 52-week range is $449.70 to $558.10. The Dow component pays an annual dividend of $6.60 (yield of 1.28%). Total shareholder return for the past 12 months was negative 1.26%.

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