BlackRock: Zacks’ Bear of the Day Play

Today’s Bear of the Day is really a prisoner of circumstance here. BlackRock (BLKAnalyst Report) is the world’s largest investor with an estimated $4.6 trillion dollars under management. You read that right, trillion with a “t.” Whether directly or indirectly, BlackRock benefits from a bullish stock market. Right now with the bears in control in the short term, it looks like that usual tailwind is blowing directly in BlackRock’s face.

BlackRock is in an industry that lies in the Bottom 8% of our Zacks Industry Rank. Analysts have dropped their earnings estimates for the current quarter, next quarter, the current year and next year helping to make BlackRock a Zacks Rank #5 (Strong Sell).

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The majority of the bearish activity is centered on the current year number. Just 90 days ago analysts were looking for $21.07 EPS from BLK. That’s since dropped to below $20 at $19.39 for the current year. Eleven analysts in total dropped their number for the current year. Next year’s number has also dropped from $24.11 to $22.32 with nine analysts lowering their earnings estimates. Their last earnings report saw EPS come in at $4.75, a full 7 cents below consensus. That’s coming off the heels of a great Q3 where the company beat by 49 cents, while posting $5 even.

It’s no wonder why shares have come under pressure since peaking over $382 in February 2015. Shares followed the general moves of the broad market, dropping to lows in August at $275. A fierce rally took BLK to $365 in late November before the selling started up again. In mid-January a dip to $280 intraday on the 20th was met with a rally that stalled out again at$316. Now the stock is buried beneath the 21-day moving average, locked in a downtrend that began in December. Adding further technical pressure, the commodity channel index has blasted down through the zero line after pushing up over 100 about a week ago. That fresh “sell” signal puts new lows on the radar.

Investors looking for other stocks in the Finance-Investment Management Industry are hard pressed to find anything right now. There are several stocks that are Zacks Rank #3 (Hold) stocks right now including AllianceBerstein (ABSnapshot Report), Eaton Vance (EVSnapshot Report) and Calamos Asset Management (CLMSSnapshot Report).

Be sure to click FOLLOW THE AUTHOR above to stay on top of all the hot momentum stocks at Zacks.com. David Bartosiak is the Momentum Stock Strategist with Zacks, editor of the Momentum Trader and Home Run Investor, and host of “Trending Stocks”

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