Overview

• U.S. custody bank's Q1 revenue rose 16% yr/yr, beating analyst expectations

• Net interest income for Q1 climbed 17%, beating analyst expectations

• Company cites record fee revenue and net interest income among main drivers for revenue growth

Outlook

• Company says macro and geopolitical environment outlook remains uncertain

• State Street highlights $315 mln in servicing fee revenue to be installed in future periods

• Company notes $2.7 trillion in AUC/A to be installed in future periods

Result Drivers

• FEE REVENUE GROWTH - Record fee revenue driven by increases in servicing, management, FX trading, and software services fees

• NET INTEREST INCOME - Net interest income rose 17%, mainly due to a higher net interest margin and increased average interest-earning assets

• MARKET ACTIVITY & NEW BUSINESS - Higher market levels, net inflows, and new servicing wins boosted assets under custody/administration and management

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 $148.00, about 4.3% above its April 16 closing price of $141.90

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

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