BlackRock Still Positioned For Growth In A Troubled Asset Management Industry

Barclays reiterated its Equal Weight rating on BlackRock, Inc. BLK said the company is poised for growth despite headwinds in the asset management industry.

"We continue to believe that BLK can sustain above-peer growth, and that its diversification, global presence, and technology make it the best positioned asset manager in our coverage," analyst Kenneth Hill wrote in a note.

Hill noted, "BlackRock continues to believe 5 percent organic growth is possible," despite industry challenges in the form of weak market environment, central bank actions, low yields, regulatory burden and competitive pressures.

The analyst highlighted BlackRock has devised a clear path to achieve mid single-digit organic AUM growth, aiming for low double-digit growth in iShares, high single-digit growth in retail and low single-digit growth in institutional.

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"To drive growth, BlackRock aims to capitalize on high-growth products like iShares, factor-based/smart-beta, alts, and multi-asset. On top of that, BlackRock sees a big opportunity to take share from other players to achieve above-industry growth, pointing out that there are still areas across retail and institutional where it has low penetration rates," Hill continued.

Hill said BlackRock has technological edge over peers with its Aladdin and FutureAdvisor platforms, while its diversification coupled with leading position in almost every market segment is driving share gains.

"We believe the firm deserves a premium valuation but that it appears to be getting credit for its healthy market position, currently trading at a 3x premium to peers," Hill added.

At the time of writing, shares of BlackRock were down 0.98 percent to $336.29, while Hill has a price target of $363.