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New York-based The Bank of New York Mellon Corporation (BK) provides a range of financial products and services, including investment and wealth management, asset servicing, and treasury solutions. Valued at a market cap of $73.1 billion, the company's global client base consists of financial institutions, corporations, government agencies, endowments and foundations, as well as high-net-worth individuals.
This bank has considerably outpaced the broader market over the past 52 weeks. Shares of BK have soared 63.8% over this time frame, while the broader S&P 500 Index ($SPX) has gained 20.6%. Moreover, on a YTD basis, the stock is up 34.9%, compared to SPX’s 9.6% rise.
Zooming in further, BK’s outperformance becomes more evident when compared to the SPDR S&P Bank ETF’s (KBE) 17.7% uptick over the past 52 weeks and 5% YTD return.
On Jul. 15, shares of BK closed down marginally after its Q2 earnings release. The company reported a record Q2 total revenue of $5 billion, up 9.4% from the year-ago quarter, with net interest income rising 16.8% and total fee and other revenue increasing 7.2% annually. Furthermore, on the earnings front, its adjusted EPS advanced 28.5% year-over-year to $1.94, topping consensus estimates by a notable margin of 11.5%. Higher average loans and deposits, along with a rise in its Assets Under Management (AUM) to $2.1 trillion, supported its quarterly performance.
For the current fiscal year, ending in December, analysts expect BK’s EPS to grow 18.1% year over year to $7.12. The company’s earnings surprise history is promising. It surpassed the consensus estimates in each of the last four quarters.
Among the 17 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on eight “Strong Buy,” three "Moderate Buy,” and six “Hold” ratings.
This configuration is less bullish than three months ago, with 10 analysts suggesting a “Strong Buy” rating.
On Aug. 1, JPMorgan Chase & Co. (JPM) analyst Vivek Juneja maintained a "Buy" rating on BK and set a price target of $105.50, implying a 1.8% potential upside from the current levels.
While the company is trading above its mean price target of $101.91, its Street-high price target of $113 suggests an upside potential of 9.1%.
