In a rapidly evolving financial landscape, banks are seeking new avenues to boost profitability and enhance growth prospects. Bank of New York Mellon Corp (NYSE:BK) has room for margin expansion and to accelerate its growth rate, according to Keefe, Bruyette & Woods.

The Bank of New York Mellon Analyst: Analyst David Konrad reiterated an Outperform rating, while raising the price target from $120 to $124.

The Bank of New York Mellon Thesis: The bank reported higher-than-expected net interest income (NII) of 3 cents per share for the third quarter, driven by "strong deposit flows," Konrad said in the note.

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Non-interest-bearing deposits rose by 3.4% "in a typically seasonally challenging quarter, driven by increased activity in capital markets and servicing," he added.

Following its strong third-quarter results, Bank of New York Mellon guided to 12% NII growth for 2025, the analyst stated.

He commented that results can get better due to:

• Tailwinds from higher markets, capital markets, and client activity.
• Opportunities arising from the bank's new commercial model and platform operating model.
• Opportunities to improve pretax margins in Investment and Wealth Management.

BK Price Action: Bank of New York Mellon shares were down 2.46% at $104.09 at the time of publication on Friday, according to Benzinga Pro data.

Bank of New York Mellon, with a market cap of $73.41 billion, operates in the capital markets sector, where it has maintained a P/E ratio of 16.32, suggesting a valuation that is relatively modest compared to historical averages in the financial industry.

The stock’s 52-week range indicates a strong performance, as it currently hovers near its high of $110.87, reflecting investor confidence in its growth potential amid a recovering economy.

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