Sarah Patel's Avatar
published in Blogs
Apr 17, 2021

State Street (STT, $80.55) beats Q1 earnings expectations; but net interest income disappoints

Financial services company State Street  posted its first-quarter results that surpassed analysts’  estimates. However, its  revenue from interest on loans was below expectations.

State Street’s adjusted earnings for the quarter came in at $1.47 a share, compared to $1.35 a share expected by analysts.

Revenue fell around -4% year-over-year to $2.95 billion, also higher than analysts’ estimates of $2.87 billion. Fee revenue rose +4% in the quarter while servicing fees climbed +7%. Its  management fees increased +6% and securities finance was +8% higher in the quarter.

Net interest income fell -30% from the year-ago quarter to $467 million, lower than the consensus forecast of $470 million. 

The company’s total expenses increased +3%, which it largely attributed to currency headwind.

 

Related Ticker: STT

STT's RSI Oscillator ascending out of oversold territory

The RSI Oscillator for STT moved out of oversold territory on May 05, 2023. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 26 similar instances when the indicator left oversold territory. In of the 26 cases the stock moved higher. This puts the odds of a move higher at .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 60 cases where STT's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .

The Momentum Indicator moved above the 0 level on May 25, 2023. You may want to consider a long position or call options on STT as a result. In of 84 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

The Moving Average Convergence Divergence (MACD) for STT just turned positive on May 17, 2023. Looking at past instances where STT's MACD turned positive, the stock continued to rise in of 42 cases over the following month. The odds of a continued upward trend are .

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where STT advanced for three days, in of 316 cases, the price rose further within the following month. The odds of a continued upward trend are .

STT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.

Bearish Trend Analysis

The 50-day moving average for STT moved below the 200-day moving average on May 12, 2023. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where STT declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.005) is normal, around the industry mean (2.312). P/E Ratio (9.588) is within average values for comparable stocks, (73.264). Projected Growth (PEG Ratio) (1.884) is also within normal values, averaging (4.298). Dividend Yield (0.036) settles around the average of (0.073) among similar stocks. P/S Ratio (2.049) is also within normal values, averaging (44.699).

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. STT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. STT’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 82, placing this stock worse than average.

Notable companies

The most notable companies in this group are Bank of New York Mellon Corp (NYSE:BK), Ares Capital Corp (NASDAQ:ARCC), WisdomTree (NYSE:WT), AMTD IDEA Group (NYSE:AMTD).

Industry description

Investment Managers manage financial assets and other investments of clients. Management includes designing a short- or long-term strategy for buying/holding and selling of portfolio holdings. It can also include tax services and other aspects of financial planning as well. While it is perceived that the industry is faced with growing competition from robo-advisors/digital platforms and passive/ index-tracking funds, many investors still find value in actively managed in-person services that investment management companies often emphasize on. At the same time, many wealth managers are also incorporating digital initiatives/low cost options in addition to their in-person customized services. Their main sources of revenues are fees as a percentage of assets under management, in addition to a certain portion of clients’ gains from asset appreciation. BlackRock, Inc., Blackstone Group Inc and Brookfield Asset Management are some of the major investment management companies.

Market Cap

The average market capitalization across the Investment Managers Industry is 4.76B. The market cap for tickers in the group ranges from 57 to 108.81B. FDLPF holds the highest valuation in this group at 108.81B. The lowest valued company is RSERF at 57.

High and low price notable news

The average weekly price growth across all stocks in the Investment Managers Industry was -0%. For the same Industry, the average monthly price growth was -0%, and the average quarterly price growth was 0%. TLGN experienced the highest price growth at 96%, while CWD experienced the biggest fall at -42%.

Volume

The average weekly volume growth across all stocks in the Investment Managers Industry was -17%. For the same stocks of the Industry, the average monthly volume growth was -20% and the average quarterly volume growth was 98%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 36
P/E Growth Rating: 46
Price Growth Rating: 61
SMR Rating: 70
Profit Risk Rating: 81
Seasonality Score: 19 (-100 ... +100)
Related Portfolios: BANKS
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