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Investing.com - Keefe, Bruyette & Woods raised its price target on Bank of New York Mellon (NYSE:BK) stock to $113.00 from $105.00 on Wednesday, while maintaining an Outperform rating.
The research firm cited BNY Mellon’s impressive quarterly performance, which included a near-28% return on tangible common equity (ROTCE) and a 37% pretax margin. According to InvestingPro data, the company maintains a GOOD financial health score, with particularly strong momentum metrics.
Keefe, Bruyette & Woods described the results as a "beat-and-raise quarter," noting that higher assets under custody/administration (AUC/A) and assets under management (AUM) with consistent fee rates should benefit the company in the second half of the year if client activity remains strong.
The firm acknowledged that BNY Mellon’s valuation at 3.2 times tangible book value might appear expensive compared to peers but believes there is room for multiple expansion.
This positive outlook is supported by the bank’s strong mid-20% ROTCE with minimal credit risk, according to the research firm’s analysis.
In other recent news, BNY Mellon reported impressive financial results for the second quarter of 2025, surpassing analysts’ expectations with an earnings per share (EPS) of $1.94, compared to the anticipated $1.75. The company’s revenue also exceeded projections, coming in at $5.03 billion against the expected $4.78 billion. This marks a strong quarter for BNY Mellon, with a 27% year-over-year increase in EPS and a 9% rise in revenue. Despite the positive earnings report, the stock experienced a pre-market decline of 2.15%. Looking ahead, BNY Mellon anticipates high single-digit growth in net interest income for the full year, alongside solid fee revenue growth. Expenses are expected to increase by approximately 3% year-over-year. The company plans to return around 100% of earnings to shareholders through dividends and buybacks. Additionally, BNY Mellon continues to innovate in digital assets and AI technologies, positioning itself well within the financial services industry.
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