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Bank of New York Mellon Corporation (BK)
NYSE:BK
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Bank of New York Mellon Corporation
(NYSE:BK)79Outperform
Positive Factors
Growth Opportunities
The CEO letter focuses on growth opportunities including capital markets, private markets, digital/new assets, high net worth, and leveraging its top tier clients for more growth.
Profitability
Margin expansion exceeded expectations, particularly in Securities Servicing and Market and Wealth segments.
Negative Factors
Expenses
Expenses were higher than expected, with the lower than expected comp ratio partially offsetting the higher than expected non-comp.
Bank of New York Mellon Corporation (BK) vs. S&P 500 (SPY)
Market Cap
$60.81B
Dividend Yield2.16%
Average Volume (3M)4.19M
Price to Earnings (P/E)14.6
Beta (1Y)0.95
Revenue Growth17.56%
EPS Growth46.36%
CountryUS
Employees53,400
SectorFinancial
Sector Strength93
IndustryAsset Management Services
Share Statistics
EPS (TTM)5.81
Shares Outstanding717,973,940
10 Day Avg. Volume5,043,856
30 Day Avg. Volume4,190,443
Financial Highlights & Ratios
PEG Ratio0.32
Price to Book (P/B)N/A
Price to Sales (P/S)3.31
Price to Cash Flow (P/CF)9.80
P/FCF Ratio2.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$95.36Price Target Upside11.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
Bank of New York Mellon Corporation Business Overview & Revenue Model
Company DescriptionThe Bank of New York Mellon Corporation (BK), commonly referred to as BNY Mellon, is a global investments company headquartered in New York City. It operates in the financial services sector and is known for providing a broad array of investment services and management products. Core services include asset and wealth management, asset servicing, issuer services, clearing services, collateral management, and treasury services. BNY Mellon caters to institutions, corporations, and high-net-worth individuals, leveraging its extensive expertise and technology to manage and service financial assets.
How the Company Makes MoneyBNY Mellon generates revenue through a diversified model comprising several key streams. Primarily, the company earns income from fees associated with its investment services, including asset and wealth management fees, securities lending, and transaction services. Asset servicing fees are another significant source of revenue, as BNY Mellon provides custody and administration of assets for institutional clients. Additionally, the company offers issuer services, which include corporate trust, depositary receipts, and equity services, adding to its revenue. Interest income from the bank's investment securities and loans also contributes to its earnings. Strategic partnerships and a global client base further enhance the company's revenue potential, while advanced technology solutions enable efficient service delivery and client retention.
Bank of New York Mellon Corporation Financial Statement Overview
Summary
The company exhibits strong revenue growth and improved profitability with a stable gross profit margin. The balance sheet reflects moderate leverage with an improved ROE. However, the cash flow situation is concerning due to a significant decline in free cash flow, necessitating improvements in liquidity management.Income Statement
The company demonstrates strong revenue growth with a 5.6% increase from 2023 to 2024. The gross profit margin remains stable at 100%, indicative of effective cost management. However, the absence of EBIT and EBITDA in 2024 may indicate potential operational challenges or reclassification of expenses. The net profit margin improved significantly to 24.8% in 2024, up from 19% in 2023, signaling enhanced profitability.85
Very Positive
Balance Sheet
The balance sheet shows a healthy equity ratio of 9.9% in 2024, reflecting a solid equity position. The debt-to-equity ratio is slightly elevated at 0.76, up from 0.78 in 2023, indicating moderate leverage but well-managed risk. Return on equity (ROE) improved to 11% in 2024, suggesting efficient use of shareholder funds to generate profits.78
Positive
Cash Flow
Cash flow analysis shows a decline in free cash flow from $4.692 billion in 2023 to a negative $782 million in 2024, primarily due to significant capital expenditures. The operating cash flow to net income ratio dropped significantly to 0.15, indicating potential cash flow mismatches. However, the previous year's strong cash position provides some cushion against these short-term cash flow issues.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 18.26B | 17.29B | 16.03B | 15.63B | 15.47B | Gross Profit |
| 18.26B | 17.29B | 16.03B | 15.63B | 15.47B | EBIT |
| 0.00 | 6.49B | 8.52B | 4.64B | 4.46B | EBITDA |
| 0.00 | 5.84B | 4.96B | 6.51B | 6.10B | Net Income Common Stockholders |
| 4.53B | 3.29B | 2.57B | 3.76B | 3.62B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 148.41B | 33.82B | 153.99B | 166.81B | 224.60B | Total Assets |
| 416.06B | 409.95B | 405.78B | 444.44B | 469.63B | Total Debt |
| 31.38B | 31.74B | 30.86B | 26.68B | 26.33B | Net Debt |
| -70.56B | -93.45B | -83.00B | -94.66B | -138.99B | Total Liabilities |
| 374.30B | 368.94B | 364.93B | 401.05B | 423.51B | Stockholders Equity |
| 41.32B | 40.87B | 40.73B | 43.03B | 45.80B |
| Cash Flow | Free Cash Flow | |||
| -782.00M | 4.69B | 13.72B | 1.62B | 3.82B | Operating Cash Flow |
| 687.00M | 5.91B | 15.07B | 2.84B | 5.04B | Investing Cash Flow |
| -9.48B | -5.81B | 19.87B | 19.67B | -78.45B | Financing Cash Flow |
| 6.34B | -3.52B | -33.65B | -21.96B | 75.51B |
Bank of New York Mellon Corporation Technical Analysis
Neutral
85.84
Price Trends
83.37
Positive
80.46
Positive
71.96
Positive
Market Momentum
0.59
Positive
49.96
Neutral
26.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BK, the sentiment is Neutral. The current price of 85.84 is below the 20-day moving average (MA) of 86.81, above the 50-day MA of 83.37, and above the 200-day MA of 71.96, indicating a neutral trend. The MACD of 0.59 indicates Positive momentum. The RSI at 49.96 is Neutral, neither overbought nor oversold. The STOCH value of 26.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BK.
Bank of New York Mellon Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $60.81B | 14.61 | 11.02% | 2.16% | 17.56% | 46.36% | |
75 Outperform | $150.31B | 23.05 | 14.67% | 2.13% | 12.15% | 15.17% | |
73 Outperform | $140.88B | 25.27 | 13.30% | 1.37% | 1.87% | 17.63% | |
71 Outperform | $20.42B | 10.68 | 16.32% | 2.89% | 29.42% | 92.95% | |
70 Outperform | $22.02B | 10.80 | 20.60% | 5.01% | 9.80% | 17.87% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
64 Neutral | $25.91B | 10.93 | 10.93% | 3.23% | 20.53% | 49.80% |
* Financial Sector Average
Performance Comparison
BK
Bank of New York Mellon Corporation
85.84
31.68
58.49%
BLK
BlackRock
946.92
140.41
17.41%
STT
State Street
89.65
18.72
26.39%
TROW
T Rowe Price
100.66
-11.97
-10.63%
SCHW
Charles Schwab
74.63
8.61
13.04%
NTRS
Northern
104.32
24.34
30.43%
Bank of New York Mellon Corporation Earnings Call Summary
Earnings Call Date: Jan 15, 2025 | % Change Since: 13.67% | Next Earnings Date: Apr 11, 2025
Earnings Call Sentiment Positive
The earnings call conveyed a predominantly positive sentiment, with record financial performance, strong segment growth, and successful new product launches. Despite some challenges in deposit mix and credit loss provisions, BNY's strategic initiatives and market positioning indicate continued momentum into 2025.Highlights
Record Financial Performance in 2024
BNY delivered record net income of $4.3 billion on record revenue of $18.6 billion, achieving a return on tangible common equity of 23% and pretax margin expansion.
Positive Operating Leverage Achieved
BNY reported 968 basis points of positive operating leverage on a reported basis and 288 basis points excluding notable items.
Strong Performance in Key Segments
Treasury Services, Clearance and Collateral Management, and Corporate Trust were among the fastest-growing businesses in 2024, demonstrating gearing towards economic growth.
Successful Launch of New Client Solutions
BNY developed new client solutions like CollateralOne, Alts Bridge, and a next-gen ETF servicing platform, contributing to the company's growth.
Significant Capital Returns to Shareholders
BNY returned 102% of 2024 earnings to shareholders, through dividends and share repurchases.
Lowlights
Challenges in Deposit Mix
Net interest income was down 1% year-over-year, reflecting changes in the deposit mix, despite balance sheet growth.
Provision for Credit Losses
BNY recorded a provision for credit losses of $20 million, primarily related to commercial real estate exposure.
FX Impact on Assets Under Management
Assets under management were up 3% year-over-year, primarily reflecting higher market values, partially offset by the unfavorable impact of the stronger dollar.
Company Guidance
During the BNY earnings call for Q4 2024, the company provided comprehensive guidance for 2025, emphasizing their strategic focus on positive operating leverage and continued transformation. BNY reported record net income of $4.3 billion and revenue of $18.6 billion, achieving a 23% return on tangible common equity for the year. For 2025, they anticipate mid-single-digit growth in net interest income, fee revenue growth, and a 1% to 2% increase in expenses, excluding notable items. The company highlighted the transition to a platform operating model, aiming to have over 80% of employees integrated by the end of 2025, which is expected to drive efficiency and growth. BNY also plans to return approximately 100% of earnings to shareholders and maintain a Tier 1 leverage ratio between 5.5% and 6%. Key metrics such as $52 trillion of AUCA and $2 trillion of AUM position BNY well to capture evolving market opportunities and trends.Bank of New York Mellon Corporation Corporate Events
M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
BNY Mellon Reports Strong 2024 Financial Performance
Positive
Jan 15, 2025
On January 15, 2025, BNY reported its financial results for the fourth quarter and full-year 2024, showcasing a strong performance with a net income of $4.3 billion and revenue of $18.6 billion for the year. The company also achieved a return on tangible common equity of 23% and returned $4.4 billion of capital to shareholders. BNY’s strategic transformation included launching new products, completing a brand refresh, acquiring a new company, and transitioning to a strategic platforms model, which strengthens its industry position and stakeholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.