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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)
75Outperform
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.
Operating Leverage
Management reiterated full-year guidance for a fourth consecutive year of positive operating leverage.
Strategic Vision
Growth in APAC is consistent with signs of economic recovery in Asia, aligning with the CEO's strategic vision.
Negative Factors
Buyback Estimates
Buyback estimates were reduced to align with a conservative payout ratio guideline.
Expenses and Credit Costs
There was a strong beat on pre-provision net revenue driven by stronger revenue growth, although offset by higher expenses and credit costs.
Fee Revenue Outlook
Lower fee revenue outlook following weaker-than-expected Investment & Wealth Mgmt performance leads to lower near-term estimates.
Bank of New York Mellon Corporation (BK) vs. S&P 500 (SPY)
Market Cap
$55.77B
Dividend Yield2.4%
Average Volume (3M)4.80M
Price to Earnings (P/E)12.7
Beta (1Y)1.01
Revenue Growth10.30%
EPS Growth49.77%
CountryUS
Employees51,000
SectorFinancial
Sector Strength77
IndustryAsset Management
Share Statistics
EPS (TTM)1.58
Shares Outstanding717,973,940
10 Day Avg. Volume5,317,286
30 Day Avg. Volume4,796,879
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.27
Price to Cash Flow (P/CF)9.70
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
$91.33Price Target Upside23.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
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
BNY Mellon demonstrates strong revenue growth and profitability with stable gross profit margins. The balance sheet shows moderate leverage and a solid equity base. However, a significant decline in free cash flow raises liquidity concerns, emphasizing the need for improved cash 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 | |||
| 200.61B | 238.93B | 225.56B | 266.75B | 313.01B |
| Total Assets | ||||
| 416.06B | 409.88B | 405.78B | 444.44B | 469.63B |
| Total Debt | ||||
| 45.44B | 46.24B | 43.19B | 38.25B | 37.64B |
| Net Debt | ||||
| -56.49B | -78.95B | -64.17B | -83.09B | -124.52B |
| Total Liabilities | ||||
| 374.30B | 368.97B | 364.93B | 401.05B | 423.51B |
| Stockholders Equity | ||||
| 41.32B | 40.77B | 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
Negative
74.04
Price Trends
82.50
Negative
81.21
Negative
74.88
Negative
Market Momentum
-2.13
Positive
37.23
Neutral
43.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BK, the sentiment is Negative. The current price of 74.04 is below the 20-day moving average (MA) of 79.03, below the 50-day MA of 82.50, and below the 200-day MA of 74.88, indicating a bearish trend. The MACD of -2.13 indicates Positive momentum. The RSI at 37.23 is Neutral, neither overbought nor oversold. The STOCH value of 43.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BK.
Bank of New York Mellon Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $44.51B | 14.06 | 68.31% | 1.27% | 11.38% | 39.25% | |
75 Outperform | $55.77B | 12.66 | 11.29% | 2.40% | 10.30% | 49.77% | |
74 Outperform | $19.14B | 9.41 | 20.60% | 5.79% | 9.80% | 17.87% | |
67 Neutral | $91.82B | 31.55 | 13.23% | 0.68% | 42.19% | -18.20% | |
66 Neutral | $17.22B | 9.04 | 16.32% | 3.40% | 29.42% | 92.95% | |
63 Neutral | $23.45B | 9.13 | 11.21% | 3.57% | 16.34% | 66.71% | |
62 Neutral | $11.85B | 9.13 | 8.11% | 79.54% | 12.80% | -5.24% |
* Financial Sector Average
Performance Comparison
BK
Bank of New York Mellon Corporation
74.04
18.44
33.17%
AMP
Ameriprise Financial
451.15
48.69
12.10%
KKR
KKR & Co
97.95
0.55
0.56%
STT
State Street
80.63
8.75
12.17%
TROW
T Rowe Price
83.55
-23.27
-21.78%
NTRS
Northern
86.78
5.27
6.47%
Bank of New York Mellon Corporation Earnings Call Summary
Earnings Call Date: Apr 11, 2025 | % Change Since: -2.76% | Next Earnings Date: Jul 16, 2025
Earnings Call Sentiment Positive
BNY reported strong financial results with significant growth in earnings and revenue, driven by positive operating leverage and successful client engagement strategies. However, the company acknowledges challenges in the current operating environment and some segments, such as Investment and Wealth Management, reported declines. Overall, the positive aspects of BNY's performance and strategic initiatives outweigh the challenges.Highlights
Strong Financial Performance
BNY delivered a solid financial performance with earnings per share of $1.58, up 26% year-over-year on a reported basis, and a total revenue of $4.8 billion, up 6% year-over-year.
Positive Operating Leverage
The company achieved positive operating leverage of 346 basis points on a reported basis and 261 basis points excluding notable items, with a pretax margin improvement to 32% and a return on tangible common equity of 24%.
Growth in Client Engagement
The number of clients buying from three or more lines of business increased by 40% over the past two years, indicating strong cross-selling efforts and client engagement.
Innovation and AI Initiatives
BNY is advancing AI use cases with OpenAI, deploying over 40 AI solutions into production, and focusing on innovative capabilities in instant payments, digital assets, and more.
Lowlights
Uncertain Operating Environment
The company faces an uncertain operating environment due to trade and fiscal policy uncertainties, geopolitical tensions, and market volatility.
Challenges in Investment and Wealth Management
Investment and Wealth Management segment reported a total revenue of $779 million, down 8% year-over-year, with investment management fees down 4%.
Provision for Credit Losses
Provision for credit losses was $18 million in the quarter, reflecting reserve increases relating to commercial real estate exposure.
Company Guidance
During BNY's 2025 First Quarter Earnings Conference Call, it was reported that the company achieved a solid financial performance with earnings per share of $1.58, marking a 26% increase year-over-year on a reported basis and a 22% increase excluding notable items. Total revenue reached $4.8 billion, up 6% from the previous year, while expenses were tightly controlled, rising only 2% year-over-year. This resulted in a meaningful positive operating leverage of 346 basis points on a reported basis and 261 basis points excluding notable items. Additionally, BNY's pretax margin improved to 32%, and the return on tangible common equity increased to 24%. The company continues to advance its transformation into a platforms-oriented company, with more than half of its operations now transitioning into the new operating model. This transformation has led to accelerated processing times and increased onboarding volumes in various sectors, such as trade finance and enterprise onboarding. Furthermore, BNY's payments team has significantly expanded its currency offerings for bank clients. The company also highlighted its ongoing innovation efforts, particularly in AI, with over 80% of employees trained on the Eliza AI platform, supporting productivity and risk management enhancements. BNY remains prepared for varying macroeconomic scenarios, leveraging its strong balance sheet and operational resilience to support clients through the current uncertain environment.Bank of New York Mellon Corporation Corporate Events
Business Operations and StrategyFinancial Disclosures
BNY Mellon Reports Strong Q1 2025 Financial Results
Positive
Apr 11, 2025
On April 11, 2025, BNY reported its financial results for the first quarter of 2025, showing a solid performance with total revenue of $4.8 billion, a 6% increase year-over-year. The company’s strategic transition to a platforms operating model and new commercial coverage approach contributed to a pre-tax margin improvement to 32% and a return on tangible common equity (ROTCE) of 24%, indicating strong operational leverage and positioning BNY to manage a range of macroeconomic scenarios.
Spark’s Take on BK Stock
According to Spark, TipRanks’ AI Analyst, BK is a Outperform.
BNY Mellon scores well due to robust financial performance, solid earnings call guidance, and fair valuation. The main strengths include strong revenue and profit growth, strategic initiatives, and a stable dividend yield. Key concerns include a significant decline in free cash flow and some technical indicators suggesting caution. Overall, BNY Mellon is positioned for continued growth, but improvements in liquidity management are necessary.
To see Spark’s full report on BK stock, click here.
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.