State Street (STT) Delivers +33% EPS Growth and Record Assets in Q3 2026
Key Takeaways
- State Street reported third-quarter 2026 diluted earnings per share (EPS) of $3.69, up 33% from $2.78 a year earlier, while total revenue rose 13% to $4.0 billion.
- Assets under custody and/or administration (AUCA) reached a record $59.2 trillion, and assets under management (AUM) hit a record $6.3 trillion, up 16% year over year.
- Net interest income (NII) climbed 21% to $864 million, aided by a 16-basis-point expansion in net interest margin (NIM) to 1.12%.
- Management raised its full-year 2026 outlook, lifting fee revenue growth guidance to 13%–14% and NII growth guidance to 15%–16%.
- Despite the strong print, shares fell roughly 7% intraday, reflecting a thin EPS beat, a slight revenue miss, and an implied softer fourth-quarter NII trajectory.
Earnings Context and Why It Matters
State Street's quarterly results serve as a bellwether for the institutional financial-services sector, given its role as one of the world's largest custodians and asset managers. The third quarter of 2026 extended a streak of positive operating leverage, with management citing an 11th consecutive quarter of year-over-year improvement. Investors watch these results closely because fee momentum, custody balances, and net interest income reveal both institutional client activity and the health of global capital markets. The report also matters because State Street has been raising guidance through the year, making each update a key test of whether its diversified servicing, markets, and software businesses can sustain durable growth into 2027. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Reported Results
State Street reported diluted EPS of $3.69 for the third quarter of 2026, modestly ahead of consensus estimates of roughly $3.62–$3.67 and up 33% year over year. Net income rose 27% to $1.09 billion. Total revenue of $4.0 billion increased 13% from a year earlier but came in slightly below expectations of around $4.04 billion.
Fee revenue grew 11% year over year, driven by record servicing fees of approximately $1.5 billion (up 10%) and record management fees of $797 million (up 20%). Net interest income reached $864 million, up 21%, supported by a 16-basis-point NIM expansion to 1.12%. Total expenses rose 8% to $2.6 billion, while the pre-tax margin expanded to about 35% and return on average common equity (ROE) stood at 16.4%.
The company's Common Equity Tier 1 (CET1) ratio, a key measure of bank capital strength, rose 20 basis points sequentially to 11.0%. State Street returned $651 million to shareholders through dividends and buybacks during the quarter. Management raised full-year 2026 guidance for fee revenue growth to 13%–14% (from 12%–13%) and for NII growth to 15%–16% (from 14%–15%), while leaving expense growth guidance unchanged at roughly 8%–8.5%.
Market Reaction and Investor Sentiment
The market's response was notably cool despite a record-filled report. Shares of STT traded down roughly 7% intraday to about $162, extending a pullback that had already trimmed the stock by double digits over the prior month. The muted reaction reflected a few dynamics. First, the EPS beat of less than 1% was far narrower than the larger surprises delivered in the prior two quarters, signaling a slowdown in the pace of upside. Second, revenue landed just below consensus. Third, management's NII commentary implied a softer fourth-quarter trajectory than some analysts had modeled, given asset sensitivity and rising rates. The results highlight that, after a strong run, investors are demanding broader outperformance to sustain the stock's valuation.
Forward Outlook and Key Factors to Monitor
Looking ahead, State Street enters the final quarter of 2026 with raised full-year guidance and confidence in its medium-term targets, including a 35% pre-tax margin and a mid-20s percent return on tangible common equity (ROTCE), both of which were reached in the third quarter. The immediate focus turns to execution against those objectives.
Investors will watch whether fourth-quarter servicing fee sales can exceed $100 million, a level that would ease concerns about the timing of large deal mandates that have periodically slipped between quarters. Capital return is another focal point: management signaled fourth-quarter buybacks of approximately $700 million as the company progresses toward an 80% full-year payout ratio.
On the balance sheet, deposit trends and deposit betas, or how quickly deposit costs respond to interest-rate changes, will influence net interest income into 2027. Rate sensitivity also matters for capital, since rising rates can pressure the CET1 ratio. Finally, guidance assumes flat equity markets and current forward rates, so sustained market strength or unexpected rate moves could alter the trajectory. Balanced against these risks are continued momentum in servicing, record AUM, and early traction in newer growth areas such as wealth services.
Using AI Tools in My Research Process
In my view, tools like Tickeron’s AI Screener help cut through the noise when reviewing earnings across financial names. I rely on it to quickly filter for technical patterns, fundamentals, and AI-driven signals that might otherwise take hours to identify manually. This approach keeps my analysis focused on what actually moves the needle for institutional names like State Street.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
STT's Indicator enters downward trend
The Aroon Indicator for STT entered a downward trend on October 12, 2026. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 113 similar instances where the Aroon Indicator formed such a pattern. In 72 of the 113 cases the stock moved lower. This puts the odds of a downward move at 64%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on September 14, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on STT as a result. In 41 of 71 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 58%.
STT moved below its 50-day moving average on September 15, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for STT crossed bearishly below the 50-day moving average on September 22, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 8 of 13 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 62%.
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 50 of 62 cases within the following month. The odds of a continued downward trend are 54%.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where STT's RSI Indicator exited the oversold zone, 16 of 17 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 90%.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 46 of 55 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 84%.
Following a +1.00% 3-day Advance, the price is estimated to grow further. Considering data from situations where STT advanced for three days, in 243 of 370 cases, the price rose further within the following month. The odds of a continued upward trend are 66%.
STT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 8 (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 Profit vs. Risk Rating rating for this company is 12 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 82, placing this stock better than average.
The Tickeron Valuation Rating of 15 (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 (1.998) is normal, around the industry mean (3.263). P/E Ratio (15.863) is within average values for comparable stocks, (27.022). Projected Growth (PEG Ratio) (0.671) is also within normal values, averaging (1.319). Dividend Yield (0.019) settles around the average of (0.081) among similar stocks. P/S Ratio (3.453) is also within normal values, averaging (15.860).
The Tickeron PE Growth Rating for this company is 24 (best 1 - 100 worst), pointing to outstanding 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 44 (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 Seasonality Score of 95 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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