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BNY Mellon's Cost-Saving Initiatives to Aid Profitability
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The Bank of New York Mellon Corporation (BK - Free Report) is well poised for bottom-line growth based on its efficient cost-saving initiatives. However, significant dependence on fee-based income as a revenue source remains a concern.
Recently, the Federal Reserve raised interest rates by 25 basis points, which is likely to ease its margin pressure further and aid top-line growth. Notably, management expects net interest revenues to be up 4-6% in 2017.
BNY Mellon’s non-interest expenses have declined over the last three years. The downward trend continued in the first three quarters of 2017 as well. Declining expenses are expected to keep supporting bottom-line growth in the near term.
Moreover, given a solid capital position, the company is expected to continue enhancing shareholder value through efficient capital deployment activities.
However, BNY Mellon’s high dependence on fee-based revenues (more than 79% as of Sep 30, 2017) makes us apprehensive. Such high reliability on fee income could alter the company’s financial position if there is any change in individual investment preferences or a slowdown in capital market activities.
Currently, analysts maintain a neutral stance on BNY Mellon’s earnings growth potential. As a result, its Zacks Consensus Estimate for the current-year earnings has remained stable over the past 30 days.
Shares of the company have gained 14.9% year to date, underperforming industry’s rally of 18.1%.
Earnings estimates for Hancock Holding have been revised slightly upward for the current year over the last 60 days. Its share price has increased 17.7% year to date.
Preferred Bank’s earnings estimates have been revised 3.4% upward for the current year over the last 60 days. Its shares have gained more than 18% so far this year.
FS Bancorp’s Zacks Consensus Estimate for current-year earnings has also been revised 2.4% up in the last 60 days. So far this year, its share price has increased nearly 31%.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
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BNY Mellon's Cost-Saving Initiatives to Aid Profitability
The Bank of New York Mellon Corporation (BK - Free Report) is well poised for bottom-line growth based on its efficient cost-saving initiatives. However, significant dependence on fee-based income as a revenue source remains a concern.
Recently, the Federal Reserve raised interest rates by 25 basis points, which is likely to ease its margin pressure further and aid top-line growth. Notably, management expects net interest revenues to be up 4-6% in 2017.
BNY Mellon’s non-interest expenses have declined over the last three years. The downward trend continued in the first three quarters of 2017 as well. Declining expenses are expected to keep supporting bottom-line growth in the near term.
Moreover, given a solid capital position, the company is expected to continue enhancing shareholder value through efficient capital deployment activities.
However, BNY Mellon’s high dependence on fee-based revenues (more than 79% as of Sep 30, 2017) makes us apprehensive. Such high reliability on fee income could alter the company’s financial position if there is any change in individual investment preferences or a slowdown in capital market activities.
Currently, analysts maintain a neutral stance on BNY Mellon’s earnings growth potential. As a result, its Zacks Consensus Estimate for the current-year earnings has remained stable over the past 30 days.
Shares of the company have gained 14.9% year to date, underperforming industry’s rally of 18.1%.
BNY Mellon carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are Hancock Holding Company , Preferred Bank (PFBC - Free Report) and FS Bancorp (FSBW - Free Report) . All these stocks hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings estimates for Hancock Holding have been revised slightly upward for the current year over the last 60 days. Its share price has increased 17.7% year to date.
Preferred Bank’s earnings estimates have been revised 3.4% upward for the current year over the last 60 days. Its shares have gained more than 18% so far this year.
FS Bancorp’s Zacks Consensus Estimate for current-year earnings has also been revised 2.4% up in the last 60 days. So far this year, its share price has increased nearly 31%.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>