Market Overview

Citi: Wait For A Better Entry Point In BlackRock

Citi: Wait For A Better Entry Point In BlackRock

Citi turned bullish on BlackRock, Inc. (NYSE: BLK) back in 2016, but the firm said its case for being aggressive on the stock no longer applies.

The Analyst

Citi's William Katz downgraded BlackRock's stock rating from Buy to Neutral with an unchanged $625 price target.

The Thesis

Citi's Katz upgraded BlackRock's stock rating to Buy on April 19, 2016 with a $410 price target at the time. The analyst said BlackRock was a "best of breed" asset manager and there were four reasons to buy the stock, including:

  • Passive growth in iShares. 
  • A play on becoming a financial technology company. 
  • Margin expansion.
  • A P/E multiple revision higher.

After nearly two years, the analyst's thesis has "played out" and BlackRock's share price is closing in on the firm's $625 price target, Katz said. The stock's status as a "core sector holding" remains unchanged, but investors may want to wait for a better entry point to buy the stock, the analyst said. 

Price Action

Shares of BlackRock have gained more than 50 percent over the past year and Wednesday's closing price of $587.67 is within striking distance of its all-time high of $592.45.

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