On Wednesday, State Street Corporation (NYSE:STT) shares received a positive assessment from Argus, leading to an increased price target. The financial services firm's price target was raised to $92.00, up from the previous $86.00, while the analyst maintained a Buy rating for the stock.
State Street recently reported its second-quarter 2024 earnings on Monday, revealing a slight decrease in earnings per share (EPS) to $2.15 from $2.17 the previous year. However, these figures surpassed the consensus estimate of $2.02.
Following the announcement, management adjusted its 2024 guidance, anticipating a 4%-5% increase in fee revenues, which is an improvement from the earlier projection of 4%.
Additionally, the company now expects a slight rise in net interest income, marking a significant improvement over the previously forecasted 5% decline. State Street also aims to achieve positive fee operating leverage and total operating leverage for the entirety of 2024.
Shareholders have reason to celebrate as the company announced a 10% dividend increase after the Federal Reserve's stress test results in June 2024. Furthermore, State Street plans to ramp up its share repurchase program in the latter half of the year, increasing from the $200 million pace set in the second quarter.
The analyst highlighted the attractive valuation of State Street's shares, which are currently trading at approximately 10 times the firm's 2024 EPS estimate and offer a 3.3% yield. The new target price of $92 reflects this optimistic outlook and the recent positive developments within the company.
In other recent news, State Street Corporation has seen a series of adjustments in its outlook by various analyst firms. RBC Capital Markets upped its price target for the company from $85 to $91, attributing this to the company's robust product and service offerings and solid capital position.
BofA Securities also increased its price target from $85 to $96, acknowledging the firm's disciplined approach to capital returns and cost management. However, the Underperform rating maintained by BofA suggests a cautious outlook compared to other financial institutions.
Deutsche Bank held its rating for State Street, raising its price target to $80. This followed State Street's Q2 results, which showed an adjusted earnings per share of $2.15, slightly missing the anticipated figure of $2.30.
Despite this, the bank's net interest income exceeded expectations. State Street also updated its full-year 2024 guidance, projecting a modest decrease in adjusted expenses, and a more favorable outlook for total fee revenue and net interest income.
Evercore ISI maintained an Outperform rating on State Street, increasing the price target to $91.00. This followed a significant turnaround in State Street's net interest income and multiple areas of guidance.
CFRA upgraded State Street's stock from a Sell to a Hold rating, raising the price target from $70.00 to $90.00. The company's projected revenues are expected to reach $12.5 billion in 2024 and $12.9 billion in 2025.
State Street has also been appointed to service Galapagos (NASDAQ:GLPG) Capital's hedge funds, a move expected to enhance operational efficiency. However, Wolfe Research downgraded State Street's stock to Underperform due to concerns about the company's earnings per share growth through 2026. These are among the recent developments shaping the trajectory of State Street Corporation.
InvestingPro Insights
In light of the recent analyst upgrade for State Street Corporation (NYSE:STT), InvestingPro data provides a deeper financial perspective on the company's performance and market position. With a robust market capitalization of $25.54 billion and a Price/Earnings (P/E) ratio of 16.03, State Street stands as a significant player in the financial services sector. The adjusted P/E ratio for the last twelve months as of Q2 2024 is even more attractive at 14.29, indicating potential value for investors. Additionally, the company's consistent dividend growth, with a notable 9.52% increase in the last twelve months as of Q2 2024, aligns with the company's announcement of a 10% dividend increase, underscoring its commitment to shareholder returns.
InvestingPro Tips highlight key points that may interest investors. Management's aggressive share buybacks signal confidence in the company's value, which can be appealing for those looking for stock with buyback activity. Moreover, State Street's impressive track record of raising its dividend for 13 consecutive years demonstrates financial stability and reliability for income-focused investors. For those interested in exploring further, there are 8 additional InvestingPro Tips available, offering insights such as earnings revisions by analysts and the stock's current trading position relative to its 52-week high. To access these tips and more, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro.
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