Ebrahim Poonawala, an analyst from Bank of America Securities, reiterated the Sell rating on State Street. The associated price target is $113.00.
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Ebrahim Poonawala’s rating is based on a combination of factors that suggest caution regarding State Street’s stock performance. Despite the company reporting a third-quarter earnings per share (EPS) that exceeded expectations, the net interest income (NII) fell short, which likely contributed to the negative market reaction. Additionally, while assets under custody and management showed significant year-over-year growth, the stock still underperformed compared to its peers.
Management has hinted at a strategic update expected in January, which could potentially enhance franchise efficiency and growth focus. However, the specifics of these actions remain unclear, and there is inherent execution risk involved. Poonawala maintains a cautious stance due to the perceived better risk/reward opportunities elsewhere in the sector, despite recognizing the stock’s trading discount relative to its closest competitor, BNY. Until more clarity on management’s strategic actions is available, the Sell rating is reiterated.
According to TipRanks, Poonawala is a 5-star analyst with an average return of 12.9% and a 67.52% success rate. Poonawala covers the Financial sector, focusing on stocks such as Truist Financial, Citigroup, and Fifth Third Bancorp.