Will This Upgrade Help Bank of New York Mellon (BK) Today?

Story updated at 10:05 a.m. to reflect market activity.

NEW YORK (TheStreet) -- Bank of New York Mellon (BK) was upgraded to "buy" from "neutral" by UBS Tuesday.

Bank of New York Mellon fell 0.3% to $33.23 in morning trading.

The firm's analysts say the upgrade is due to rate driven capital relief.

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Separately, TheStreet Ratings team rates BANK OF NEW YORK MELLON CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate BANK OF NEW YORK MELLON CORP (BK) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, expanding profit margins and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for BANK OF NEW YORK MELLON CORP is currently very high, coming in at 97.53%. Regardless of BK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 14.65% trails the industry average.
  • Despite the weak revenue results, BK has outperformed against the industry average of 17.4%. Since the same quarter one year prior, revenues slightly dropped by 1.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • BANK OF NEW YORK MELLON CORP's earnings per share declined by 17.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BANK OF NEW YORK MELLON CORP reported lower earnings of $1.74 versus $2.05 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus $1.74).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: BK Ratings Report

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