Balanced Outlook: Hold Rating for Bank of New York Mellon Amid Positive NII and Cautious Fee Revenue Forecast

Citi analyst Keith Horowitz has reiterated their neutral stance on BK stock, giving a Hold rating on April 1.

Keith Horowitz has given his Hold rating due to a combination of factors that reflect both positive and cautious elements in Bank of New York Mellon Corporation’s outlook. While the bank has shown strength in net interest income (NII) and positive operating leverage, concerns about macroeconomic volatility and a more conservative fee revenue outlook have tempered expectations. The bank’s management has maintained guidance for positive operating leverage and mid-single-digit growth in NII, which is slightly below the high-single-digit growth expected by some analysts.
However, despite the potential for NII outperformance and continued strength in asset servicing and market services fees, the outlook for fee operating leverage is less optimistic due to a lowered revenue forecast in Investment & Wealth Management. Although there are strong underlying drivers for fee growth as the bank transitions to a new platform model, much of this potential seems already reflected in the current stock price. As a result, Horowitz maintains a neutral stance, balancing the positive elements with the challenges faced by the bank.

According to TipRanks, Horowitz is a 5-star analyst with an average return of 10.4% and a 63.13% success rate. Horowitz covers the Financial sector, focusing on stocks such as Capital One Financial, Huntington Bancshares, and Regions Financial.

In another report released on April 1, Evercore ISI also maintained a Hold rating on the stock with a $87.00 price target.