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The Bank of New York Mellon Corporation (BK), headquartered in New York, provides a range of financial products and services. Valued at $53.6 billion by market cap, the company provides asset and wealth management, asset servicing, issuer, clearing, and treasury services for institutions, corporations, and high-net-worth individuals. The world's largest custodian bank and securities services company is expected to announce its fiscal third-quarter earnings for 2024 before the market opens on Friday, Oct. 11.
Ahead of the event, analysts expect BK to report a profit of $1.38 per share on a diluted basis, up 8.7% from $1.27 per share in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in its last four quarterly reports. In the previous quarter, BK maintained a positive operating leverage on the back of solid fee growth and continued expense discipline.
For the full year, analysts expect BK to report EPS of $5.63, up 11.5% from $5.05 in fiscal 2023.
BK stock has significantly outperformed the S&P 500’s ($SPX) 34.2% gains over the past 52 weeks, with shares up 70% during this period. Similarly, it outshined the S&P 500 Financials Sector SPDR’s (XLF) 35.8% gains over the same time frame.
BK’s performance has been robust over the past year, bolstered by the recent interest rate cut, which is anticipated to reduce funding costs and improve the company’s net interest revenues and margins. While management has maintained its guidance for a 10% decline in net interest revenues this year, they are driving growth through new services, digitized operations, and strategic acquisitions.
On Sep. 23, BK shares rose more than 1% after Deutsche Bank Aktiengesellschaft (DB) upgraded the stock to “Buy” from “Neutral” with a price target of $80.
On Jul. 12, BK shares closed up more than 5% after reporting its Q2 earnings results. Its net interest revenue of $1.03 billion surpassed the consensus of $1.01 billion. The company’s revenue grew 2.1% year over year to $4.6 billion. BK’s adjusted EPS came in at $1.51, surpassing the estimates by 5.6%.
Analysts’ consensus opinion on BK stock is reasonably bullish, with a “Moderate Buy” rating overall. Out of 17 analysts covering the stock, 10 advise a “Strong Buy” rating, one suggests a “Moderate Buy,” and six give a “Hold.” BK’s average analyst price target is $72.88, indicating a potential upside of 1.6% from the current levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
