Back to top

Analyst Blog

On March 14, 2014, we issued an updated research report on State Street Corporation (STT - Analyst Report). Though the company reported lower-than-expected fourth-quarter results, its strong balance sheet position and steady capital deployment activities remain impressive.

State Street is well positioned for organic growth. Further, management expects revenues to grow in the range of 3%–5% in 2014. Additionally, State Street remains on track to lower pre-tax expenses from operations in the range of $575 million to $625 million by the end of 2014.

Also, from the capital perspective, State Street is favorably placed. We believe that the new capital rules announced by the Federal Reserve, which require banks to maintain higher capital ratios, will not likely impact the company much owing to its capital strength. Given the strong capital position, the company continues to enhance shareholders’ value through regular dividend payouts and share buyback activities.

However, State Street’s earnings missed the Zacks Consensus Estimate owing to higher-than-expected non-interest expenses. Further, a drop in net interest income and deteriorating capital ratios were the other headwinds.

Additionally, the disappointing results triggered a downward revision in the Zacks Consensus Estimate, as analysts became more bearish on State Street’s future performance. For 2014, the Zacks Consensus Estimate dropped nearly 1% to $4.98 per share and for 2015, the Estimate fell 4.4% to $5.63 per share in the past 60 days.

State Street now has a Zacks Rank #3 (Hold).

Stocks That Warrant a Look

Some better-ranked banking stocks include Wells Fargo & Company (WFC - Analyst Report), Comerica Incorporated (CMA - Analyst Report) and Hancock Holding Company (HBHC - Analyst Report). All of these have a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%