"State Street is poised to deliver solid fee revenue growth this year in light of healthy backlogs and organic growth within the FX and securities lending business," analysts at Credit Suisse said.
Additionally, strength here should be offset by softer spread revenues as the firm de-risks the securities portfolio to comply with LCR (Liquidity Coverage Ratio), according to the analyst note.
State Street is a financial holding parent company that provides financial and managerial support to its legal and operating subsidiaries.
Shares of State Street are down 0.35% to $80.57 in morning trading Friday.
Separately, TheStreet Ratings team rates STATE STREET CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate STATE STREET CORP (STT) 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 solid stock price performance, increase in net income, revenue growth, reasonable valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Capital Markets industry average. The net income increased by 12.7% when compared to the same quarter one year prior, going from $363.00 million to $409.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 4.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for STATE STREET CORP is currently very high, coming in at 96.30%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.14% trails the industry average.
- You can view the full analysis from the report here: STT Ratings Report