Bank of New York Mellon's shares have now returned 14% year-to-date, following a 33% decline during 2011.
The shares are trading for 1.9 times their reported June 30 tangible book value of $11.47, and for nine times the consensus 2013 earnings estimate of $2.41, among analysts polled by Thomson Reuters. The consensus 2012 EPS estimate is $2.06.
Jefferies analyst Ken Usdin rates Bank of New York Mellon a "Hold," with a $26 price target, and said in an Aug. 2 report discussing trust banks' efficiency initiatives that the company's "efficiency plan was slightly incremental ($1mm benefit to pre-tax income) in 2Q," which "was a positive surprise, as management had previously indicated that the program would be a net drag on profitability for the balance of the year as program costs overcome gross saves.Bank of New York Mellon expects between $160 million and $170 million in cost reductions during 2013. Usdin said that through the second quarter, the company had incurred $28 million in expenses tied to the efficiency plan, leaving "over $90mm of program costs to book in the second half." Usdin estimates that Bank of New York Mellon will earn $2.00 a share for all of 2012, followed by EPS of $2.40 in 2013. Interested in more on Bank of New York Mellon? See TheStreet Ratings' report card for this stock.
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