State Street Q2 revenue beat estimates on higher servicing and management fees

State Street Corporation

State Street Corporation

STT

0.00


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

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Revenue

Beat

$4.05 bln

$3.88 bln (11 Analysts)

Q2 EPS

$3.65

Q2 Net Income

$1.08 bln

Q2 Net Interest Income

Beat

$860 mln

$831.13 mln (8 Analysts)

Q2 ROE

16.70%


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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