CFRA Upgrades State Street (STT) to Buy
CFRA analyst Kenneth Leon upgraded State Street (NYSE: STT) from Hold to Buy with a price target of $113.00 (from $117.00).
The analyst comments "We see an enhanced opportunity with a lower share price and raise our 12-month target $4 to $113 on an 11.5x P/E, below the five-year historic average at 12.6x. We up our 2025 EPS view $0.30 to $9.80 and set 2026's at $10.85 on respective revenue projections of $13.6B and $14.0B. STT posted Q4 EPS of $2.60, a $0.15 consensus earnings beat on $3.4B in revenue, +12% Y/Y. STT guides for 2025 net interest income (NII) to be flat Y/Y, but NII was only 22% of 2024 total net revenues; service fee revenue is the largest contributor. Total non-NII fee revenue was +13% Y/Y, with servicing fees +6%, management fees +20%, forex trading services +17%, securities finance +22%, and software and processing fees +9%. Total deposits were +19% Y/Y, with a boost to interest-bearing deposits (+37%) and loans (+18%). Assets under custody and administration was $46.7T (+11% Y/Y) and AUM was $4.7T (+15%). In 2024, STT returned $2.2B to shareholders ($1.3B in buybacks and $900M in dividends) and offered a 3% dividend yield."
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Shares of State Street closed at $100.49 yesterday.