11:57 AM EDT, 10/07/2024 (MT Newswires) -- BlackRock's (BLK) Q3 earnings will likely be higher than consensus driven by "higher assets under management levels" and better below-the-line items like lower taxes and share count, Morgan Stanley said in an earnings preview on Monday.

The company's private market business remains in focus particularly due to the Global Infrastructure Partners and Preqin deals, which are expected to drive growth, the analysts said.

"As the Fed cuts rates, we expect idle cash on the sidelines to move into risk assets, including duration extension in fixed income, supporting an acceleration in organic growth," Morgan Stanley said.

The analysts also expect a slight decline in the base fee rate due to crosswinds but remain optimistic for future fee rate expansion with the integration of Global Infrastructure Partners and investor rotation into risk assets.

BlackRock is also on track to compound earnings at a double-digit rate over the next three years, supported by high-margin private market strategies and M&A activities, according to the note.

The company is set to release its Q3 earnings on Friday.

Morgan Stanley increased its price target to $1,150 from $1,036 and kept its overweight rating on the stock.

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