BlackRock Gets Citigroup Upgrade

NEW YORK ( TheStreet)-- BlackRock ( BLK)can continue to grow despite $3.6 trillion in assets under management, and other fears around the stock are overblown, Citigroup analysts argued in upgrading the shares to buy from neutral Monday.

Citigroup analyst William Katz raised his price target by $30 to $220--14.5 times his 2013 earnings estimates, which he also moved higher in Monday's report. BlackRock shares closed Friday at $187.39.

BlackRock shares have been held back by fears the money manager's exchange traded fund revenues will suffer from a price war with Vanguard, CEO Larry Fink could become President Obama's next Treasury Secretary, or the company may be designated a systemically important financial institution (SIFI) and subjected to tighter regulation, according to the report.

Katz argues these fears are overblown. He believes a move by Vanguard to use a cheaper benchmark from University of Chicago for its indices, rather than MSCI, will result in many institutional money managers sticking with BlackRock ETFs. He sees 3% growth for BlackRock's ETF business in 2013, consistent with industry trends. Katz also believes CEO Fink has tried to allay concerns he wants to be the next Treasury Secretary, but adds that the company is mature enough at this point that it can continue to grow without Fink if need be. Finally, he believes regulators do not have a strong case to designate BlackRock a SIFI, despite widespread concerns over the money market industry.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

More from Stocks

Tesla CEO Elon Musk Is a Rock Star: Kiss Icon Gene Simmons

Tesla CEO Elon Musk Is a Rock Star: Kiss Icon Gene Simmons

The Best Investment Advice? Stay Diversified

The Best Investment Advice? Stay Diversified

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Listen: Should You Buy Cisco Now?

Listen: Should You Buy Cisco Now?

Amazon Could Devastate Walgreens and Rite Aid by Getting Into Pharmacy Business

Amazon Could Devastate Walgreens and Rite Aid by Getting Into Pharmacy Business