(Bloomberg) -- BlackRock Inc.'s assets under management are set to exceed $15 trillion in five years' time, analysts at Morgan Stanley said, with the broker predicting that fixed income and cash management will help propel the investment manager's growth.
The world's top asset manager has already seen a boost amid the recent turmoil in the US banking sector, following the collapse of Silicon Valley Bank in March. BlackRock reported $110 billion of net inflows for the first quarter, beating estimates, while assets rose to $9.09 trillion.
The gains are likely to continue, according to Morgan Stanley analyst Michael Cyprys, raising BlackRock's price target to $861 from $829, the second-highest among analysts tracked by Bloomberg. Cyprys, a BlackRock bull who has always had an overweight rating on the stock, identifies four “growth zones” for the firm, including fixed income, cash management, private markets and Aladdin, its investment-management technology platform. These are set to drive annual organic asset growth of 5% over the next three years.
“BlackRock's scale, diversification, disciplined investments made across market cycles and efficient operations with focus on expenses should support continued organic growth and margin expansion,” Cyprys wrote in a note. The analyst predicts that BlackRock's assets under management should grow to $10 trillion in the next few quarters from today's $9 trillion, eventually topping $15 trillion in five years' time.
BlackRock's shares had declined 2.4% this year through Friday's close, though have been rebounding since mid-March. The stock is narrowly higher to start the week, gaining 0.7%.
--With assistance from Bre Bradham.
(Updates to add regular hours trading.)
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