Earnings Previews: BlackRock, Delta Air Lines, JPMorgan

A couple of financial sector heavyweights lead off the September quarter earnings season Tuesday morning, with many of the sector’s other giants coming later in the week.

Scattered among the financials this week are the world’s largest chipmaker, a couple of Dow Jones industrial stocks, and a major materials producer. Next week, the floodgates open.

Here’s a look at three major earnings reports due before markets open on Wednesday.

BlackRock

The world’s largest investment management firm, BlackRock Inc. (NYSE: BLK), claims more than $9 trillion in assets under management. Over the past 12 months, its shares have added about 45%, including a drop of 11% since late August. The Financial Times reported Monday morning that three of the firm’s top fixed-income bond ETFs have posted net outflows of nearly $24 billion this year. Not a huge dip, considering BlackRock’s massive asset base, but a signal, perhaps, that chasing returns could continue the erosion in fixed-income exchange-traded funds.

Analysts remain bullish on the firm, with 10 of 13 giving the shares Buy or Strong Buy ratings and the rest rating the stock at Hold. At the recent price near $846.50, the upside potential on the shares, based on a median price target of $989, is 16.8%. At the high price target of $1,117, the upside potential is 32%.

Third-quarter 2021 revenue is forecast at $4.89 billion, up about 1.5% sequentially and nearly 12% higher year over year. Adjusted earnings per share (EPS) are forecast at $9.61, down 4.2% sequentially and up 4.2% year over year. For the full 2021 fiscal year, analysts are currently forecasting EPS of $37.85, up 12.9%, on sales of $16.2 billion, up 20.0%.

BlackRock stock trades at 22.3 times expected 2021 EPS, 19.8 times estimated 2022 earnings and 17.7 times estimated 2023 earnings. The stock’s 52-week range is $587.90 to $959.89. The company pays an annual dividend of $16.52 (yield of 1.96%).

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JPMorgan

The largest (by market cap) of the big U.S. banks, JPMorgan Chase & Co. (NYSE: JPM) has seen a share price jump of 75% over the past 12 months. Just over 37% of the gain has come since the beginning of 2021. Perhaps the most anticipated data point will be the bank’s operating leverage, the ratio between the 12-month change in expenses and revenues. Analysts have forecast that several big banks, including JPMorgan, will report negative operating leverage in the third quarter.

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