BlackRock stays overweight U.S. equities including SPY, arguing profit revisions offset higher rates and oil. SPY trades at a 12% premium to its estimated intrinsic value with a Mixed Alpha Score.
BlackRock called for an overweight stance on U.S. equities including the SPDR S&P 500 ETF Trust (SPY) on September 15, citing corporate profit revisions that it said can absorb higher rates and energy costs.
Ten-year Treasury yields have climbed to levels unseen since 2007. Brent crude trades above $100 a barrel on geopolitical supply risks. BlackRock's argument is that upward earnings revisions offer a cushion against those headwinds, leaving the firm comfortable with its overweight allocation.
At $757.32, SPY trades 12% above the $676.36 intrinsic value estimated by GuruFocus' GF Value model. The AlphaScala Alpha Score of 50 out of 100, labeled Mixed, points to neutral risk-reward at the current multiple.
The GF Score of 86 out of 100 reflects strong quality. Profitability and growth each score 9 out of 10, supported by trailing earnings growth of 54% over one year and 26% over three. Financial strength scores 6.3 out of 10; valuation scores 6. The trailing P/E of 23x sits above the 5-year median, though the model does not provide a precise historical baseline.
State Street, the ETF's issuer, carries an Alpha Score of 73, labeled Moderate, reflecting a more favorable company-level setup. The SPY fund itself, as a passive vehicle, does not generate insider trading signals.
GuruFocus tracks 15 gurus holding SPY. In the most recent quarter, six added to positions while 11 trimmed. The pattern suggests some profit-taking balanced by continued institutional conviction.
SPY closed at $757.32 on September 15, a 12% premium to the model's intrinsic estimate.
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