BlackRock (BLK) delivered a largely clean Q2 performance, with margin expansion reinforcing confidence that organic base fee growth can be sustained at the high end of guidance, UBS said in a note emailed Thursday.

The firm's shift toward higher-margin private markets is driving durable gains, and private credit and AI-related concerns are unlikely to offset intact fundamentals, the note said.

Operating margin reached 45.9%, up 260 basis points year over year, driven by roughly $15 billion of private-markets inflows spanning credit, infrastructure, and an outsourced private-equity mandate, according to the note.

UBS raised its 2026 and 2027 EPS estimates by 4.5% and 4.0%, respectively, citing continued margin upside as GIP, HPS, and Preqin integrations scale.

UBS maintained its buy rating and raised the price target to $1,320 from $1,270.

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