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State Street Corporation (STT), headquartered in Boston, Massachusetts, provides a range of financial products and services to institutional investors worldwide. Valued at $27.5 billion by market cap, the company’s products and services include custody, accounting, administration, daily pricing, international exchange services, cash management, financial asset management, securities lending, and investment advisory services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and STT perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the asset management industry. State Street's strong brand and global presence are key strengths attracting a diverse client base across over 100 markets. Its robust financial performance, with substantial assets under custody and management, provides flexibility to invest in strategic initiatives and weather economic downturns.
Despite its notable strength, STT slipped 6.4% from its 52-week high of $103, achieved on Jan. 30. Shares of STT gained 9.8% over the past three months, outperforming the S&P 500 Index’s ($SPX) 5.4% rise during the same time frame.
In the longer term, shares of STT dipped 1.8% on a YTD basis, underperforming SPX’s YTD gains of 1.7%. However, the stock climbed 34.5% over the past 52 weeks, outperforming SPX’s 9.3% returns over the last year.
To confirm the bullish trend, STT has been trading above its 50-day and 200-day moving averages since early May.
STT's outperformance stems from solid fee revenue growth, driven by higher management fees and increased foreign exchange trading activity.
On Apr. 17, STT shares closed up more than 2% after reporting its Q1 results. Its EPS increased 48.9% year over year to $2.04. The company’s revenue stood at $3.3 billion, up 4.7% year over year.
STT’s rival, Blackstone Inc. (BX) shares lagged behind the stock, with a 21.3% downtick on a YTD basis and a 11.1% gainover the past 52 weeks.
Wall Street analysts are moderately bullish on STT’s prospects. The stock has a consensus “Moderate Buy” rating from the 18 analysts covering it, and the mean price target of $105.25 suggests a potential upside of 9.1% from current price levels.
