Overview

• U.S. custody bank's Q2 revenue rose 17% yr/yr, beating analyst expectations

• Net interest income for Q2 beat analyst expectations

• Diluted EPS for Q2 rose 68% yr/yr to $3.65

Outlook

• State Street says it is entering a new phase with medium-term financial targets

• Company expects ongoing technology and AI transformation to drive sustainable growth

• State Street highlights future installations of servicing fee revenue and AUC/A

Result Drivers

• FEE REVENUE GROWTH - Co said higher management fees, servicing fees, and FX trading services drove 17% yr/yr fee revenue growth

• NET INTEREST INCOME - Net interest income rose 18%, reflecting an increase of 17 basis points in net interest margin

• ASSET GROWTH - Record AUC/A and AUM mainly due to higher market levels, flows, and net new business

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 11 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the investment management & fund operators peer group is "buy"

• Wall Street's median 12-month price target for State Street Corp is $190.00, about 1.8% above its July 15 closing price of $186.59

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 11 three months ago

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