Citi Research has raised its 12 month price target for BlackRock, Inc. (NYSE:BLK) by $10 to $285 following Citi Research-sponsored investor meetings with senior management that included Mr. Gary Shedlin, CFO & Senior Managing Director; Mr. Tom Wojcik, Head of Investor Relations; and Ms. Maggie Marcotte, VP of Investor Relations.blackrock inc

In the report, Citi analysts William R Katz, Neil Stratton and Steven J Fullerton revised their 2013-15 adjusted EPS estimates for BlackRock, Inc. (NYSE:BLK) with a slight upside due to market impact. The report is positive on the number of points like overall positioning, capacity to hit key financial metrics, ability to overcome key risks etc.

First impression of BlackRock, Inc. (NYSE:BLK)’s new CFO favorable

Analysts talked to the newly appointed CFO in BlackRock, Inc. (NYSE:BLK) and became optimistic on certain issues. According to the analysts, CFO Shedlin has an in depth understanding of key industry dynamics and regulatory framework, and a better understanding of BLK’s platform along with many detailed model nuances and drivers. Overall, the first impression was favorable.

Key takeaways from the meet

In the report, analysts noted that BlackRock, Inc. (NYSE:BLK)’s  management is more concerned about the long term outlook for style box investing in the retail channel as according to them, investors are more concerned with absolute, outcome oriented mandates.

So far, iShares have been the most important catalyst and management expects 10 percent annual organic high single-digit growth in Retail; and single-digit Institutional growth, net of likely further DB run-off. Management feels that Retail distribution review in the U.K. and Europe will be the key growth driver for ETFs. Management is expecting some operating leverage along with the analysts who think that there will be incremental margins due to spending overlay even if there is branding, compliance and regulatory infrastructure costs.

Citi analysts are not expecting any large scale deals, along with little chance of any tactical deals. However, there can be alternative investments in the due course. BlackRock, Inc. (NYSE:BLK)’s Management is not expecting U.S. ETF acquisition in the ST with no particular attractive targets at present.

Issues noted by analysts

BlackRock, Inc. (NYSE:BLK)’s management has maintained that around 75 percent of FI AUM is institutional, and they are not expecting pick up in redemptions (total firm AUM is close to $4 trillion). On the growth front, significant factors were non U.S. and FI, and on the pricing front management are expecting some fee pressure due to increase in core series, but there are chances that it will become a net profit contributor. The greatest concern is uncertainty and opacity in the non-bank SIFI determination.

The analysts feel concern over the share valuation due to limited potential to surge in the short term even after taking in a more optimistic target P/E multiple. Researchers believe that there might be more significant turns in active equities, and a surge in the United States retail share may take one more year.