BlackRock (BLK) sees a path to expand its operating margin to 47% in 2027 and 48% in 2028 on account of accelerating revenue growth, higher fee rates on flows, and efficient use of technology and automation, Morgan Stanley said in a Thursday note.

Looking ahead, Morgan Stanley raised its Q3 earnings per share estimate on the company to $14.13 from $13.91, and increased its 2026 EPS view to $55.77 from $53.71.

For 2027, BlackRock EPS is now expected to be $64.71 from $62.86, driven by higher average AUM stemming from Q2's 0.3% end of period and average AUM beats as well as long term flow estimates in Q3, according to the research note.

Additionally, Morgan Stanley said that tokenization and digital assets remain a meaningful long-term growth opportunity for the company, with BlackRock currently recording $110 billion in digital assets-related AUM and continuing to target $500 million of annual revenue from the business by 2030.

With the retirement channel another meaningful growth priority for the company, the firm said BlackRock is "well positioned" to provide the investment expertise, technology and data required to administer retirement portfolios at scale.

Morgan Stanley raised its price target on the company's stock to $1,488 from $1,383 and maintained its overweight rating.

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