Jefferies Reduces Estimates on Trust Banks, Favors State Street (STT) In Poor Market Conditions
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Price: $57.44 --0%
Rating Summary:
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Today's Overall Ratings:
Up: 10 | Down: 8 | New: 8
Rating Summary:
14 Buy, 10 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 10 | Down: 8 | New: 8
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Jefferies has reduced its estimates on companies within its trust banking segment largely due to the magnitude of the market declines.
The S&P 500 has fallen 11 percent throughout this quarter and has really impacted core business. The firm notes that with less than a month left in the third quarter, there is no real chance for market comps to head in the green direction.
The firm also adjusted its estimates to account for a stand-pat Fed through 2013.
Typically FX fees fall in the third quarter as volumes usually slow, but recent checks indicate that FX volatility is up roughly 7 percent through August as volumes look to be flattish quarter-over-quarter.
An analyst at Jefferies comments, “The average 3-month LIBOR to Fed funds spread is up 3% on average vs. 2Q. While a slight increase is somewhat encouraging, much of the fee strength in 2Q was tied to stronger demand related to more profitable international dividend payments. Accordingly, we have revised our estimates for securities lending fees only slightly higher and now bake in a 26% sequential decline on average.”
Jefferies is reaffirming its Hold rating on shares of The Bank of New York Mellon Corp. (NYSE: BK) while lowering its price target from $29 to $23 and its 2011 and 2012 EPS estimates from $2.25 and $2.45 to $2.20 and $2.10.
The firm is maintaining its Hold rating on shares of Northern Trust Corp. (Nasdaq: NTRS) and is cutting its price target from $52 to $39. Jefferies also reduced its 2011 and 2012 EPS estimates from $2.70 and $3.25 to $2.58 and $2.50.
Jefferies is reiterating its Buy rating on shares of State Street Corp. (NYSE: STT), but is lowering its price target from $57 to $42 and its 2011 and 2012 EPS estimates from $3.70 and $4.05 to $3.50 and $3.50. The firm believes that STT is your best bet in currently as it has the best chance to weather what they call as a "EPS revision storm."
The S&P 500 has fallen 11 percent throughout this quarter and has really impacted core business. The firm notes that with less than a month left in the third quarter, there is no real chance for market comps to head in the green direction.
The firm also adjusted its estimates to account for a stand-pat Fed through 2013.
Typically FX fees fall in the third quarter as volumes usually slow, but recent checks indicate that FX volatility is up roughly 7 percent through August as volumes look to be flattish quarter-over-quarter.
An analyst at Jefferies comments, “The average 3-month LIBOR to Fed funds spread is up 3% on average vs. 2Q. While a slight increase is somewhat encouraging, much of the fee strength in 2Q was tied to stronger demand related to more profitable international dividend payments. Accordingly, we have revised our estimates for securities lending fees only slightly higher and now bake in a 26% sequential decline on average.”
Jefferies is reaffirming its Hold rating on shares of The Bank of New York Mellon Corp. (NYSE: BK) while lowering its price target from $29 to $23 and its 2011 and 2012 EPS estimates from $2.25 and $2.45 to $2.20 and $2.10.
The firm is maintaining its Hold rating on shares of Northern Trust Corp. (Nasdaq: NTRS) and is cutting its price target from $52 to $39. Jefferies also reduced its 2011 and 2012 EPS estimates from $2.70 and $3.25 to $2.58 and $2.50.
Jefferies is reiterating its Buy rating on shares of State Street Corp. (NYSE: STT), but is lowering its price target from $57 to $42 and its 2011 and 2012 EPS estimates from $3.70 and $4.05 to $3.50 and $3.50. The firm believes that STT is your best bet in currently as it has the best chance to weather what they call as a "EPS revision storm."
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