State Street Corporation (NYSE:STT) Receives Consensus Rating of "Moderate Buy" from Brokerages

Key Points

• State Street has a “Moderate Buy” consensus rating from 16 analysts, with nine buys, two strong buys and five holds; the average 12-month price target is $185.38.
• The company exceeded quarterly expectations, reporting $3.65 in EPS versus $3.34 expected and $4.05 billion in revenue, up 23.3% year over year. State Street also raised its quarterly dividend to $0.92, implying a 1.9% annual yield.
• STT shares opened at $193.37, near their 52-week high of $195.93, while institutional investors own 87.44% of the stock. Recent analyst actions were generally positive, including higher price targets from Keefe, Bruyette & Woods and Citigroup.

Shares of State Street Corporation (NYSE:STT - Get Free Report) have earned a consensus recommendation of "Moderate Buy" from the sixteen research firms that are covering the firm, MarketBeat Ratings reports. Five research analysts have rated the stock with a hold recommendation, nine have assigned a buy recommendation and two have given a strong buy recommendation to the company. The average 1 year target price among brokerages that have issued a report on the stock in the last year is $185.3750.

Several analysts have recently weighed in on the stock. Keefe, Bruyette & Woods raised their price objective on shares of State Street from $195.00 to $215.00 and gave the company an "outperform" rating in a research report on Friday, July 17th. Royal Bank Of Canada increased their target price on State Street from $155.00 to $196.00 and gave the company a "sector perform" rating in a research note on Friday, July 17th. UBS Group set a $176.00 price target on State Street in a research report on Friday, June 26th. Citigroup lifted their price target on State Street from $193.00 to $210.00 and gave the stock a "buy" rating in a research note on Friday, July 17th. Finally, Zacks Research upgraded State Street from a "hold" rating to a "strong-buy" rating in a report on Tuesday, July 21st.

Key Stories Impacting State Street

Here are the key news stories impacting State Street this week:

• Positive Sentiment: An analysis argues that State Street’s preferred shares offer an approximately 6.8% dividend yield, which could appeal to income-focused investors and highlight the company’s ability to support attractive capital returns. The article primarily concerns preferred securities, so the direct effect on STT common shares may be limited. State Street: 6.8% Preferred Dividend Yield Is Too Good To Ignore
• Positive Sentiment: State Street appointed Tim Helyar to lead its Asia-Pacific business effective September 10. The leadership change may support the company’s regional growth strategy in asset servicing and investment management, though no immediate financial impact was disclosed. State Street Corporation Announces Appointment of Tim Helyar to Head of Asia Pacific
• Neutral Sentiment: State Street and affiliated asset-management entities reported that their holdings fell below substantial-holder thresholds in IDP Education, Inghams Group, Sims, Breville Group, Greatland Resources, Amotiv, Austal, Elsight, Service Stream, and Smartgroup. These notices may reflect routine portfolio rebalancing, index changes, or client-driven trading; they do not necessarily represent a negative view of State Street or materially affect its earnings. State Street Ownership Disclosures
• Negative Sentiment: Harbor Mid Cap Value Fund trimmed its State Street position following the stock’s appreciation. The sale could create modest near-term supply and signals that at least one investor is taking profits, although it does not indicate a change in State Street’s fundamentals. Harbor Mid Cap Value Fund Trimmed State Street Following Appreciation

Insider Activity at State Street

In other State Street news, CEO Ronald O’Hanley sold 14,553 shares of the company's stock in a transaction that occurred on Tuesday, July 21st. The stock was sold at an average price of $184.17, for a total value of $2,680,226.01. Following the completion of the sale, the chief executive officer owned 240,959 shares of the company's stock, valued at $44,377,419.03. This represents a 5.70% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, EVP W. Hu sold 9,758 shares of the stock in a transaction that occurred on Friday, July 24th. The shares were sold at an average price of $184.52, for a total transaction of $1,800,546.16. Following the transaction, the executive vice president owned 49,794 shares in the company, valued at $9,187,988.88. The trade was a 16.39% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 0.27% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On State Street

A number of large investors have recently added to or reduced their stakes in the business. California State Teachers Retirement System grew its stake in shares of State Street by 16,194.0% during the second quarter. California State Teachers Retirement System now owns 76,843,386 shares of the asset manager's stock valued at $13,032,638,000 after buying an additional 76,371,782 shares during the last quarter. BlackRock Inc. purchased a new stake in State Street during the 2nd quarter valued at about $4,139,389,000. Regents of The University of California grew its position in State Street by 15.6% during the 1st quarter. Regents of The University of California now owns 10,065,118 shares of the asset manager's stock worth $1,273,841,000 after acquiring an additional 1,358,923 shares during the last quarter. Morgan Stanley increased its stake in State Street by 9.0% in the 4th quarter. Morgan Stanley now owns 5,222,382 shares of the asset manager's stock worth $673,740,000 after purchasing an additional 433,201 shares during the period. Finally, Victory Capital Management Inc. lifted its position in State Street by 30.8% in the fourth quarter. Victory Capital Management Inc. now owns 4,559,546 shares of the asset manager's stock valued at $588,227,000 after purchasing an additional 1,074,174 shares during the last quarter. Hedge funds and other institutional investors own 87.44% of the company's stock.

State Street Stock Up 1.1%

STT stock opened at $193.37 on Friday. The company has a current ratio of 0.59, a quick ratio of 0.59 and a debt-to-equity ratio of 1.04. The company's 50 day moving average is $186.78 and its 200 day moving average is $160.33. The stock has a market cap of $53.12 billion, a price-to-earnings ratio of 17.05, a price-to-earnings-growth ratio of 0.91 and a beta of 1.41. State Street has a 1-year low of $104.64 and a 1-year high of $195.93.

State Street (NYSE:STT - Get Free Report) last announced its earnings results on Thursday, July 16th. The asset manager reported $3.65 earnings per share (EPS) for the quarter, beating the consensus estimate of $3.34 by $0.31. The business had revenue of $4.05 billion during the quarter, compared to analyst estimates of $3.88 billion. State Street had a net margin of 15.02% and a return on equity of 15.26%. State Street's revenue for the quarter was up 23.3% on a year-over-year basis. During the same period in the previous year, the business posted $2.04 earnings per share. Sell-side analysts predict that State Street will post 13.76 EPS for the current fiscal year.

State Street Increases Dividend

The company also recently announced a quarterly dividend, which will be paid on Tuesday, October 13th. Investors of record on Thursday, October 1st will be given a $0.92 dividend. This represents a $3.68 dividend on an annualized basis and a yield of 1.9%. The ex-dividend date is Thursday, October 1st. This is a positive change from State Street's previous quarterly dividend of $0.84. State Street's dividend payout ratio is presently 32.45%.

About State Street

State Street Corporation is a financial services company headquartered in Boston, Massachusetts. Founded in 1792, it serves institutional investors, asset managers, asset owners, insurance companies, official institutions and other financial organizations worldwide.

Through its investment servicing business, State Street provides custody and fund administration, accounting, transfer agency, middle-office outsourcing, collateral management, performance measurement and regulatory reporting services.

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