UPDATE - UBS Starts Bank of New York Mellon (BK) at Neutral; Levered to Higher Rates

UPDATE - UBS initiates coverage on Bank of New York Mellon (NYSE: BK) with a Neutral. PT $20.00.

UBS analyst says, "BK is one of the global leaders in asset servicing and processing, and we believe it will continue to grow its global footprint in the foreseeable future. BK is attractively priced currently, but it is limited vs. peers for capital deployment and more negatively impacted by the low rate environment."

"BK is operating with lower capital levels compared to the group. BK generates a significant amount of capital per annum ($2 bln, or 15%, of Tier 1 Common) but the lower level of capital may limit the impact of deployment near term. Another headwind is litigation risk, which has weighed on the stock’s valuation, although a favorable resolution could be a positive catalyst. Sovereign risk is low; higher risk exists from the revenue stream, 29% of which is derived from EMEA."

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 $18.82 yesterday.

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