BlackRock Stock Near Key Trendline Ahead of Earnings

Analysts have been upbeat towards the investment management stock

Managing Editor
Jul 13, 2018 at 2:26 PM
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BlackRock, Inc. (NYSE:BLK) is in focus alongside other financial stocks this week and next, with the company slated to report its second-quarter earnings Monday morning. BlackRock stock has struggled since its January record peak, and fell below the 200-day moving average late last month -- its first dip below the trendline since March 2017. BLK is up 0.4% at $508.23, at last check, a stone's throw from its year-to-date breakeven mark.

Daily Chart of BLK with 200 MA 3

Digging into earnings history, BLK stock has closed higher the day after the company reported in five of the past eight quarters -- including the last three in a row. On average, the shares have swung 1.6% in the subsequent session over this two-year time frame, regardless of direction. This time around, the options market is pricing in a 2.2% next-day move for Monday's trading.

In the options pits, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows the financial concern with a 10-day call/put volume ratio of 3.16, ranking in the 98th percentile of its annual range. In other words, calls have been purchased over puts at a faster-than-usual clip during the past two weeks -- albeit amid lighter volume. 

In the same sentiment, analyst attention has been optimistic towards BlackRock stock, with nine of the 11 brokerage firms following it sporting "buy" or "strong buy" ratings. Further, BLK's average 12-month price target of $606.33 sits at a 19.5% premium to current trading levels.


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