On Thursday, Bank of New York Mellon’s (NYSE: NYSE:BK) shares leapt by 8%, a significant performance when compared to the Bank Index (BKX), which it surpassed by 390 basis points. Keefe, Bruyette & Woods analysts maintained their Outperform rating and $96.00 price target on the stock, underlining that the day’s results were driven by robust growth in net interest income (NII) and diligent cost control.
The analysts highlighted the company’s momentum in servicing income as a key factor in the strong quarterly performance. In addition, a substantial 7% quarterly increase in NII was attributed to heightened client activity and corporate trust services. This growth is seen as a pivotal element of the quarter’s success, aligning with the company’s overall revenue growth of 6.71% in the last twelve months.
Despite an expectation for deposit moderation in 2025, the analysts anticipate a 5% growth in net interest income for the year, spurred by better-than-expected results in the second half of 2024. The firm’s outlook remains positive, with projections of continued upward momentum for the stock.
Bank of New York Mellon’s current valuation mirrors that of its peers, trading at 10.7 times its estimated 2026 earnings. However, the financial institution is expected to outshine its competitors with a 24% return on tangible common equity (ROTCE), compared to the 15.5% average among its peers. Keefe, Bruyette & Woods analysts suggest that despite the day’s gains, there is still considerable potential for the stock’s value to rise further.
In other recent news, Bank of New York Mellon has reported robust earnings and revenue results for the fourth quarter of 2024. The financial giant posted adjusted earnings per share of $1.54, surpassing the analyst consensus of $1.51. Revenue for the quarter was reported at $4.85 billion, exceeding the estimated $4.64 billion. These results highlight a significant increase from the same period in the previous year.
In other developments, CFRA analyst Kenneth Leon has increased the price target for Bank of New York Mellon shares to $95 from the previous $88, while maintaining a Buy rating. This adjustment reflects a positive outlook based on the company’s performance and future earnings projections.
Lastly, the bank reported $52.1 trillion in assets under custody and/or administration as of December 31, 2024, highlighting its dominant position in the global financial services industry. Moreover, BNY Mellon’s assets under management reached a notable $2.0 trillion by the end of the quarter. These are recent developments that provide insights into the company’s financial health.
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