Bank of New York Mellon (BK) PT Raised to $75 at Citi
Citi analyst Keith Horowitz raised the price target on Bank of New York Mellon (NYSE: BK) to $75.00 (from $70.00) while maintaining a Neutral rating.
The analyst comments "BK reported a strong 3Q, and the stock underperformed on the day (-40bps vs BKX +3%), but then recaptured much of this underperformance on the following trading day as market digested the results. Mgmt. revised full-year NII guide higher to -5% y/y (vs cons at -6.5%) and noted they don’t expect NII to be a headwind in ’25 (we see NII up 3-4% y/y next year). We expect mgmt. will deliver positive operating leverage in ’25 (~130bps), as they benefit from continued solid fee performance, notably in Asset Servicing and Clearance and Collateral Management, and proven commitment to expense discipline. We expect BK will deliver ’25 returns in the low-to-mid twenties and a payout ratio of ~100% (we assume pace of buybacks at ~$800mil/qtr), but given we believe this outlook is already largely priced in, we reiterate our Neutral rating."