diff --git a/packages/core/schematics/migrations/block-template-entities/util.ts b/packages/core/schematics/migrations/block-template-entities/util.ts
index b9675e5028fd9..f2521b953fd1a 100644
--- a/packages/core/schematics/migrations/block-template-entities/util.ts
+++ b/packages/core/schematics/migrations/block-template-entities/util.ts
@@ -66,11 +66,7 @@ export class AnalyzedFile {
  * @param analyzedFiles Map in which to store the results.
  */
 export function analyze(sourceFile: ts.SourceFile, analyzedFiles: Map<string, AnalyzedFile>) {
-  for (const node of sourceFile.statements) {
-    if (!ts.isClassDeclaration(node)) {
-      continue;
-    }
-
+  forEachClass(sourceFile, node => {
     // Note: we have a utility to resolve the Angular decorators from a class declaration already.
     // We don't use it here, because it requires access to the type checker which makes it more
     // time-consuming to run internally.
@@ -86,7 +82,7 @@ export function analyze(sourceFile: ts.SourceFile, analyzedFiles: Map<string, An
         null;
 
     if (!metadata) {
-      continue;
+      return;
     }
 
     for (const prop of metadata.properties) {
@@ -112,7 +108,7 @@ export function analyze(sourceFile: ts.SourceFile, analyzedFiles: Map<string, An
           break;
       }
     }
-  }
+  });
 }
 
 /**
@@ -183,3 +179,13 @@ class TextRangeCollector extends RecursiveVisitor {
     super.visitText(text, null);
   }
 }
+
+/** Executes a callback on each class declaration in a file. */
+function forEachClass(sourceFile: ts.SourceFile, callback: (node: ts.ClassDeclaration) => void) {
+  sourceFile.forEachChild(function walk(node) {
+    if (ts.isClassDeclaration(node)) {
+      callback(node);
+    }
+    node.forEachChild(walk);
+  });
+}
diff --git a/packages/core/schematics/test/block_template_entities_spec.ts b/packages/core/schematics/test/block_template_entities_spec.ts
index cd28bc2550afb..cd9c2e15d532f 100644
--- a/packages/core/schematics/test/block_template_entities_spec.ts
+++ b/packages/core/schematics/test/block_template_entities_spec.ts
@@ -276,4 +276,23 @@ describe('Block template entities migration', () => {
 
     expect(content).toBe('My email is admin&#64;test.com');
   });
+
+  it('should migrate a component that is not at the top level', async () => {
+    writeFile('/comp.ts', `
+      import {Component} from '@angular/core';
+
+      function foo() {
+        @Component({
+          template: \`<div><span>My email is admin@test.com</span></div><h1>This is a brace }</h1>\`
+        })
+        class Comp {}
+      }
+    `);
+
+    await runMigration();
+    const content = tree.readContent('/comp.ts');
+
+    expect(content).toContain(
+        'template: `<div><span>My email is admin&#64;test.com</span></div><h1>This is a brace &#125;</h1>`');
+  });
 });