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BNY (BK) AI Stock Analysis

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BK

BNY

(NYSE:BK)

Rating:79Outperform
Price Target:
$116.00
▲(10.81% Upside)
The Bank of New York Mellon Corporation's stock score is driven by its strong financial performance and positive earnings call, showcasing robust revenue growth and strategic advancements. The technical analysis supports a bullish outlook, while the valuation indicates fair pricing. Challenges in the Investment Management segment are noted but do not significantly detract from the overall positive assessment.
Positive Factors
Digital Innovation
BNY is considered at the forefront of digital innovation in the financial services sector, ranging from the adoption of digital assets to AI-led productivity gains.
Earnings
The company experienced a significant EPS beat driven by fees and net interest income, showing positive operating leverage for the sixth consecutive quarter.
Management Confidence
Management indicated that medium-term targets could be raised, suggesting confidence in the company's growth potential.
Negative Factors
M&A Uncertainty
It is unclear whether a potential deal would encounter anti-trust issues given the scale of the pro-forma bank in the custody business.
Organic Growth Challenges
Organic revenue growth seems far from an easy short-term fix and still waits to be seen.
Revenue Growth Uncertainty
The ability to generate sustainably higher revenue growth still seems to be determined.

BNY (BK) vs. SPDR S&P 500 ETF (SPY)

BNY Business Overview & Revenue Model

Company DescriptionBNY Mellon (BK) is a global investments company dedicated to helping clients manage and service their financial assets throughout the investment lifecycle. The company operates primarily in two sectors: Investment Management and Investment Services. BNY Mellon offers a wide range of products and services, including asset servicing, treasury services, wealth management, and investment management, catering to institutional investors, corporations, and individuals worldwide.
How the Company Makes MoneyBNY Mellon generates revenue through a diversified model that primarily includes fee-based services and asset management. Key revenue streams consist of asset servicing fees, which are charged for managing clients' investments and providing custody services, and investment management fees from managing client assets across various investment strategies. Additionally, the company earns revenues from treasury services, which include cash management and foreign exchange services. Significant partnerships with financial institutions, corporations, and asset owners enhance its service offerings and broaden its client base, contributing to stable earnings. The company also benefits from a global network that allows it to capture a wide array of client needs, ultimately driving growth and profitability.

BNY Earnings Call Summary

Earnings Call Date:Jul 15, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 16, 2025
Earnings Call Sentiment Positive
The earnings call showcased a strong overall performance with significant revenue growth, positive operating leverage, and strategic advancements in digital assets. Despite notable achievements, challenges in the Investment Management segment and net outflows were highlighted as areas needing improvement.
Q2-2025 Updates
Positive Updates
Strong Earnings Growth
Earnings per share of $1.93 were up 27% year over year on a reported basis and up 28% excluding notable items.
Record Revenue Achievement
Total revenue exceeded $5 billion in a quarter for the first time, up 9% year over year.
Positive Operating Leverage
Generated significant positive operating leverage, roughly 500 basis points on both the reported and operating basis.
Advancements in Digital Assets
Selected as reserve custodian for Societe Generale's first USD stablecoin in Europe and Ripple's US stablecoin reserves.
Increased Capital Returns
Returned $1.2 billion of capital to common shareholders, resulting in a 92% total payout ratio year to date.
Improved Financial Metrics
Pretax margin improved to 37%, and return on tangible common equity improved to 28%.
Negative Updates
Investment Management Challenges
Investment and Wealth Management segment reported total revenue of $801 million, down 2% year over year, with investment management fees down 1%.
Net Outflows in Investment Management
Reported $17 billion of net outflows driven by index multi-asset and equity strategies.
Net New Assets Decline
Net new assets were a negative $10 billion in the quarter due to the deconversion of a client acquired by a self-clearing competitor.
Company Guidance
During the 2025 Second Quarter Earnings Conference Call for The Bank of New York Mellon Corporation, significant metrics were highlighted, showcasing the company's robust performance. Earnings per share reached $1.93, marking a 27% increase year over year on a reported basis, and a 28% increase when excluding notable items. Total revenue exceeded $5 billion for the first time in a quarter, up 9% year over year, with a 4% growth in expenses, resulting in approximately 500 basis points of positive operating leverage. The pretax margin rose to 37%, and the return on tangible common equity improved to 28%. Additionally, Assets Under Custody and Administration (AUCA) reached $55.8 trillion, increasing 13% year over year, while Assets Under Management (AUM) stood at $2.1 trillion, up 3% year over year. The company also maintained a solid capital and liquidity position, with a Tier 1 leverage ratio of 6.1% and a CET1 ratio of 11.5%. Total fee revenue saw a growth of 7%, while net interest income climbed by 17% year over year. The company's strategic focus remains on driving organic growth, enhancing client relationships, and leveraging its diversified business model and innovative platforms to capitalize on evolving market trends.

BNY Financial Statement Overview

Summary
The Bank of New York Mellon Corporation exhibits strong financial health with impressive revenue and profit growth, a solid balance sheet with low leverage, and improving cash flows. While there are minor fluctuations in some areas, the overall financial position is robust, supported by consistent growth and effective cost management.
Income Statement
85
Very Positive
The Bank of New York Mellon Corporation has demonstrated consistent revenue growth with a TTM revenue increase from the previous year. Gross profit margins are nearly at the total revenue level, indicating strong cost control. Net profit margin shows a healthy increase, reflecting improved profitability. However, there is a slight decline in EBIT margin, suggesting rising operational expenses. Overall, the income statement reflects robust revenue growth and profitability.
Balance Sheet
78
Positive
The company's balance sheet indicates a solid equity base with a relatively low debt-to-equity ratio, highlighting low financial leverage. The equity ratio has remained stable, showcasing a strong asset base. There is a consistent increase in total assets, which is a positive indicator of growth. However, the reduced cash and equivalents over the year may require monitoring. Overall, the balance sheet is stable with low leverage and strong equity support.
Cash Flow
72
Positive
Operating cash flow has demonstrated growth, reflecting strong cash generation from operations. The free cash flow this year shows a rebound, indicating effective capital expenditure management. The operating cash flow to net income ratio is healthy, suggesting effective earnings conversion into cash. However, fluctuations in free cash flow in previous periods highlight potential volatility in cash management. Overall, cash flows are improving, but require careful management to maintain stability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue39.72B39.55B33.79B19.80B15.86B15.47B
Gross Profit18.45B18.19B17.37B16.15B15.86B15.47B
EBITDA7.83B7.65B6.17B5.26B6.51B0.00
Net Income4.72B4.53B3.30B2.56B3.76B3.62B
Balance Sheet
Total Assets440.69B416.06B409.88B405.78B444.44B469.63B
Cash, Cash Equivalents and Short-Term Investments167.93B200.61B238.93B225.56B266.75B313.01B
Total Debt48.41B45.44B46.24B43.19B38.25B37.64B
Total Liabilities397.07B374.30B368.97B364.93B401.05B423.51B
Stockholders Equity43.12B41.32B40.77B40.73B43.03B45.80B
Cash Flow
Free Cash Flow2.29B-782.00M4.69B13.72B1.62B3.82B
Operating Cash Flow3.78B687.00M5.91B15.07B2.84B5.04B
Investing Cash Flow-1.54B-9.48B-5.81B19.87B19.67B-78.45B
Financing Cash Flow-995.00M6.34B-3.52B-33.65B-21.96B75.51B

BNY Technical Analysis

Technical Analysis Sentiment
Positive
Last Price104.68
Price Trends
50DMA
99.01
Positive
100DMA
92.03
Positive
200DMA
86.44
Positive
Market Momentum
MACD
1.71
Positive
RSI
65.53
Neutral
STOCH
73.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BK, the sentiment is Positive. The current price of 104.68 is above the 20-day moving average (MA) of 103.31, above the 50-day MA of 99.01, and above the 200-day MA of 86.44, indicating a bullish trend. The MACD of 1.71 indicates Positive momentum. The RSI at 65.53 is Neutral, neither overbought nor oversold. The STOCH value of 73.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BK.

BNY Risk Analysis

BNY disclosed 1 risk factors in its most recent earnings report. BNY reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

BNY Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$73.84B15.9911.75%1.85%7.41%51.70%
76
Outperform
$13.20B48.742.16%4.97%4.72%-67.85%
74
Outperform
$9.66B23.255.74%3.78%6.79%
71
Outperform
$24.82B15.2513.47%2.31%3.44%16.76%
71
Outperform
$32.13B12.6910.94%2.69%11.66%67.88%
68
Neutral
$17.88B11.6610.24%3.76%9.66%1.70%
66
Neutral
$48.53B15.9558.24%1.21%7.11%9.89%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BK
BNY
104.68
38.24
57.56%
AMP
Ameriprise Financial
511.90
77.67
17.89%
BEN
Franklin Resources
25.53
7.20
39.28%
IVZ
Invesco
21.70
6.07
38.84%
STT
State Street
114.06
31.56
38.25%
NTRS
Northern
129.70
42.70
49.08%

BNY Corporate Events

Private Placements and Financing
BNY Announces Public Offering of Depositary Shares
Neutral
Sep 3, 2025

On September 3, 2025, The Bank of New York Mellon Corporation announced a proposed public offering of depositary shares, each representing a 1/100th interest in a share of its new Series L Noncumulative Perpetual Preferred Stock. The proceeds from this offering are intended for general corporate purposes, including the potential redemption of its Series H and Series G Noncumulative Perpetual Preferred Stock, subject to market conditions. The offering’s pricing and the decision to redeem these stocks are not guaranteed and will depend on future market conditions.

Business Operations and StrategyFinancial Disclosures
BNY Mellon Reports Strong Q2 2025 Financial Results
Positive
Jul 15, 2025

On July 15, 2025, BNY Mellon reported its financial results for the second quarter of 2025, achieving a 9% year-over-year revenue increase, surpassing $5 billion for the first time in a quarter. The company demonstrated significant positive operating leverage, resulting in a pre-tax margin of 37% and a return on tangible common equity (ROTCE) of 28%. This performance underscores BNY’s ongoing transformation and momentum, with record sales and enhanced operational efficiency following the launch of its new commercial model last year.

Stock BuybackDividends
Bank of New York Mellon Increases Quarterly Dividend
Positive
Jul 1, 2025

On July 1, 2025, The Bank of New York Mellon Corporation announced its intention to increase its quarterly common stock cash dividend by 13%, from $0.47 to $0.53 per share, starting in the third quarter of 2025, pending Board approval. Additionally, the Federal Reserve confirmed that the company’s Stress Capital Buffer requirement will remain at 2.5%, effective from October 1, 2025, to September 30, 2026. The company is also authorized to continue its share repurchase program, with repurchases subject to factors like capital position and market conditions. The Federal Reserve’s proposed revisions to the capital plan rule are not expected to impact the company’s SCB requirement.

Executive/Board ChangesBusiness Operations and Strategy
BNY Mellon CEO Robin Vince Elected Chairman
Neutral
Jun 12, 2025

On June 12, 2025, The Bank of New York Mellon Corporation announced that Robin Vince, the current CEO, was elected as Chairman of the Board of Directors, effective September 1, 2025, succeeding Joseph J. Echevarria. Echevarria will transition to the role of lead independent director. This leadership change is expected to leverage Vince’s strategic approach and deep understanding of BNY’s business to continue the firm’s transformation and drive strategy, while Echevarria will facilitate communication between independent directors and the Chairman.

Private Placements and FinancingBusiness Operations and Strategy
Bank of New York Mellon Issues $2 Billion Notes
Neutral
Jun 10, 2025

On June 10, 2025, The Bank of New York Mellon Corporation issued $2 billion in callable senior medium-term notes due in 2028 and 2036. This issuance, registered under the Securities Act of 1933, reflects the company’s strategic financial management and may impact its capital structure and stakeholder interests.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 19, 2025