Morgan Stanley Lowers Price Target for Bank of New York Mellon to $90.00

On January 4, 2025, Morgan Stanley announced a reduction in the price target for Bank of New York Mellon (NYSE:BK) from $94.00 to $90.00. This adjustment was shared in a recent research note aimed at investors. Despite this change, the firm continues to maintain an overweight rating on the stock of the bank.

Other research analysts have also provided their perspectives on the stock recently. Royal Bank of Canada reaffirmed a “sector perform” rating with a price target of $79.00 in a report dated October 14. Meanwhile, Keefe, Bruyette & Woods raised their price target from $87.00 to $96.00, giving Bank of New York Mellon an “outperform” rating on December 3. Additionally, UBS Group increased their target from $73.00 to $82.00 and rated the stock as a “buy” in a note released on October 8. StockNews.com also upgraded their rating from “hold” to “buy” as of December 14. Finally, Deutsche Bank raised their target from $82.00 to $85.00 with a “buy” recommendation on November 11. Overall, five analysts suggest holding the stock, while ten analysts recommend buying it. According to MarketBeat.com, the average rating for Bank of New York Mellon stands at “Moderate Buy” with an average price target of $80.77.

Current Trading Overview

As of the last trading session, Bank of New York Mellon shares opened at $76.93. The bank holds a market capitalization of approximately $55.93 billion. Its price-to-earnings (P/E) ratio is 16.72, with a price-to-earnings-growth (PEG) ratio of 0.91. The stock has reached a low of $51.86 and a high of $82.72 over the past year. Presently, the current ratio and quick ratio both stand at 0.70, while the debt-to-equity ratio is 0.89. The firm’s fifty-day simple moving average is recorded at $78.38, and the 200-day moving average is $70.75.

Quarterly Earnings and Dividends

Bank of New York Mellon recently announced its quarterly earnings results on October 11. The bank reported earnings of $1.52 per share, surpassing average expectations of $1.41 by $0.11. The company recorded a return on equity of 12.06% with a net margin of 9.44%. The revenue for the quarter was reported at $4.65 billion, also exceeding analysts’ predictions of $4.52 billion. Looking ahead, analysts forecast the bank to report earnings of $5.84 per share for the current fiscal year.

On another note, the bank declared a quarterly dividend recently, which was paid out on November 1. The dividend of $0.47 was issued to shareholders on record as of October 21, marking an annualized dividend of $1.88 with a yield of 2.44%. Currently, Bank of New York Mellon’s dividend payout ratio is 40.87%.

Insider Transactions

In terms of insider activity, VP Hanneke Smits sold 16,475 shares on October 15, at an average price of $76.47, totaling about $1.26 million. Following this sale, Smits holds approximately 157,455 shares valued at around $12.04 million, reflecting a decrease of 9.47% in her holdings. Additionally, EVP J. Kevin McCarthy sold 25,000 shares on the same day at an average of $76.31, for a total of about $1.91 million. Post-transaction, McCarthy's stake is now 75,404 shares valued at $5.75 million, indicating a 24.90% decrease in his position. Currently, insiders own about 0.14% of the company’s shares.

Institutional Shareholding Trends

Many hedge funds have recently altered their positions in Bank of New York Mellon. State Street Corp, for instance, increased its stake by 2.0% during the third quarter, owning nearly 33.31 million shares worth roughly $2.39 billion after adding 659,096 shares. FMR LLC also enhanced its holdings dramatically by 78.6%, acquiring an additional 8.51 million shares, elevating its total to approximately 19.34 million shares valued at about $1.39 billion. Meanwhile, Ameriprise Financial Inc. and Victory Capital Management Inc. also increased their stakes during this period. Notably, institutional investors and hedge funds hold around 85.31% of Bank of New York Mellon's stock.

About the Bank

The Bank of New York Mellon Corporation is a financial services company that offers an array of products and services both in the United States and globally. The bank operates through various segments, including Securities Services, Market and Wealth Services, and Investment and Wealth Management, among others. Its Securities Services segment provides custody, trust, depositary services, as well as exchange-traded funds, accounting, and data analytics services.

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