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On Monday, Truist Securities adjusted its outlook for State Street Corporation (NYSE:STT), reducing the price target from $89.00 to $85.00 while maintaining a Hold rating on the stock. This change comes in the wake of State Street’s first-quarter earnings report and subsequent management commentary. According to InvestingPro data, State Street, currently valued at $24.5 billion by market cap, has seen its stock decline nearly 16% year-to-date, despite maintaining a conservative P/E ratio of 9.13x.
Truist’s analysts revised their financial model for State Street to incorporate the company’s recent quarterly results. Despite State Street reiterating its guidance, the analysts at Truist found it necessary to slightly modify their estimates for the future, taking into account the potential for increased economic risk. InvestingPro data reveals that seven analysts have recently revised their earnings estimates downward for the upcoming period, while the company maintains its impressive 55-year streak of consecutive dividend payments, currently yielding 3.74%.
The 2025 earnings per share (EPS) estimate was trimmed by $0.05, bringing it down to $9.40. However, the 2026 EPS forecast remains unchanged at $10.15. The reduction in the price target to $85 reflects these adjustments and the anticipation of heightened economic challenges ahead.
The decision to maintain the Hold rating suggests that Truist Securities sees State Street as appropriately valued at the time, with the current stock price reflecting the balance of known risks and potential growth.
In their commentary, the analysts stated, "Following 1Q reporting, we update our State Street model to include the results from the quarter and latest management commentary. With State Street broadly reiterating guidance, we make only minimal tweaks to 2025 estimate but lower our price target to reflect heightened economic risk. We lower our 2025E EPS estimate by $0.05 to $9.40, leave our 2026E EPS estimate unchanged at $10.15, and lower our price target to $85 (from $89). We maintain our Hold rating."
Investors will likely keep an eye on how State Street navigates the economic landscape and whether the company can meet or exceed the revised expectations set forth by Truist Securities. InvestingPro analysis suggests the stock is currently slightly undervalued, with additional insights available through the comprehensive Pro Research Report, which provides deep-dive analysis of State Street among 1,400+ top US stocks.
In other recent news, State Street Corporation reported its first-quarter 2025 earnings, showcasing an earnings per share (EPS) of $2.04, slightly above the anticipated $2.00. Despite the revenue falling short of projections at $3.28 billion against the expected $3.32 billion, the company experienced a 21% year-over-year growth in EPS. Additionally, State Street returned $320 million to shareholders through repurchases and dividends. The company maintains a positive outlook, targeting $350-400 million in new servicing fee revenue wins and $500 million in productivity savings for the year. In terms of analyst coverage, State Street’s strategic initiatives and resilience were highlighted, with firms like Autonomous and Seaport Global engaging in discussions about the company’s capital return and expense management strategies. The company is also focused on expanding its ETF offerings and strengthening partnerships, such as those with Apollo Global Management (NYSE:APO) and Bridgewater Associates. State Street’s CEO, Ron O’Hanley, emphasized the company’s strategic agility and commitment to delivering financial returns amidst global uncertainties.
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