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Boston-based State Street Corporation (STT) provides various financial products and services to institutional investors worldwide. With a market cap of $22.3 billion, State Street serves asset managers, retirement plan providers, insurance companies, foundations, and more. The financial services firm is expected to announce its fiscal Q2 earnings for 2024 before the market opens on Tuesday, July 16.
Ahead of the event, analysts expect State Street to report a profit of $2.02 per share, down 6.9% from $2.17 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimate over the last four quarters. Its EPS for the last reported quarter increased 11.2% year over year to $1.69 per share, beating the Wall Street estimates by 14.2%.
Looking ahead to fiscal 2024, analysts expect State Street to report an EPS of $7.94, up 3.7% from $7.66 in fiscal 2023. Its fiscal 2025 EPS is projected to grow 9.3% annually to $8.68.
STT Stock is down 4.3% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 15.7% returns and S&P 500 Financials Sector SPDR’s (XLF) 10.6% gains over the same time frame.
State Street has faced pressure due to an increase in prevailing interest rates and changing market conditions, its interest expense saw a rise of 72.3% resulting in an overall decline in net interest income by 6.5%. However, the robust growth in fee revenue has offset the decrease in net interest income. The company saw massive increases in software and processing fees and management fees by 25.5% and 11.6% respectively. Due to State Street’s operational resilience, it saw a rise in total revenue of 1.2%.
The consensus opinion on State Street stock is moderately bullish, with a “Moderate Buy” rating overall. Out of 17 analysts covering the stock, eight give a “Strong Buy” rating, seven are playing it safe with a “Hold,” one suggests a “Moderate Sell,” and the remaining one advises a “Strong Sell” rating.
The average target price for State Street is $86.83, indicating a potential upside of 17.6% from the current price levels.
On the date of publication, Sristi Jayaswal 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.
