Goldman Sachs Downgrades Bank of New York Mellon (BK) to Sell on Headwinds and Valuation
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Price: $57.09 -0.76%
Rating Summary:
14 Buy, 10 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
Rating Summary:
14 Buy, 10 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 9
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Goldman Sachs downgraded Bank of New York Mellon (NYSE: BK) from Neutral to Sell with a price target of $22.00, suggesting 19% downside.
The firm said recent outperformance versus peers STT and NTRS amid a rise in the 10-year Treasury yields is unwarranted given EPS risks in 2013 (we are 8% below
consensus) and a premium valuation of 13X P/E (ex discount accretion), 18% above recent history.
"While we continue to view BK as a leading global asset servicing/management business that is well positioned for the eventual recovery in short-term interest rates, we believe the recent move in 10-year yields has little to no impact on the firm's near-term earnings power and consensus remains too optimistic on BK's growth prospects amid challenges in a number of the firm’s high-margin businesses," the analyst said.
The firm's 2012/2013/2014 EPS estimates are $2.02/$2.20/$2.45, below the Street’s $2.07/$2.38/$2.68.
For an analyst ratings summary and ratings history on Bank of New York Mellon click here. For more ratings news on Bank of New York Mellon click here.
Shares of Bank of New York Mellon closed at $27.29 yesterday.
The firm said recent outperformance versus peers STT and NTRS amid a rise in the 10-year Treasury yields is unwarranted given EPS risks in 2013 (we are 8% below
consensus) and a premium valuation of 13X P/E (ex discount accretion), 18% above recent history.
"While we continue to view BK as a leading global asset servicing/management business that is well positioned for the eventual recovery in short-term interest rates, we believe the recent move in 10-year yields has little to no impact on the firm's near-term earnings power and consensus remains too optimistic on BK's growth prospects amid challenges in a number of the firm’s high-margin businesses," the analyst said.
The firm's 2012/2013/2014 EPS estimates are $2.02/$2.20/$2.45, below the Street’s $2.07/$2.38/$2.68.
For an analyst ratings summary and ratings history on Bank of New York Mellon click here. For more ratings news on Bank of New York Mellon click here.
Shares of Bank of New York Mellon closed at $27.29 yesterday.
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