BlackRock (BLK) enters a seasonally strong Q4, with UBS Securities highlighting robust organic fee growth and a shift toward margin expansion as key drivers ahead of its results on Friday.

The brokerage said in a Monday note that while 2026 guidance may not be a major catalyst, the market increasingly recognizes BlackRock's transition from margin stabilization to a margin expansion narrative.

UBS expects BlackRock's base organic fee growth in Q4 to be between 7.5% and 8.5%, comfortably above the company's roughly 5% target. The company is also expected to reaffirm about 5% organic base fee growth, maintain its tax-rate guidance and raise buyback guidance to $400 million per quarter from $375 million.

Core general and administrative expenses remain a key swing factor. The investment firm noted that if management guides to 8% to 10% year-on-year growth versus UBS's 9.4% estimate, it could provide slight upside to Wall Street's earnings per share expectations.

The brokerage lowered its Q4 EPS estimate slightly to $12.35 from $12.45 due to non-operating items but increased its 2026 and 2027 EPS estimates by 3% each, to $54.10 and $60.90, respectively, mainly on higher assets under management.

Fund flows in December, including equity market strength and the funding of an $80 billion mandate, are expected to support higher AUM and organic base fee growth. UBS sees a positive setup into earnings, with the stock having lagged peers year-to-date and sentiment remaining mixed.

The firm raised its price target on BlackRock to $1,218 from $1,180, with a neutral rating.

Price: 1082.18, Change: -2.92, Percent Change: -0.27