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Analyst Blog

Shares of State Street Corporation (STT - Analyst Report) hit a new 52-week high, touching $61.82 in the first half of the trading session on May 13. The closing price of this well-known global bank reflected a solid year-to-date return of 28.2%. The trading volume for the session was 2.5 million shares.

Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock still has plenty of upside left, given its strong estimate revisions over the last 30 days and the expected year-over-year earnings growth of 13.1% for 2013.

Growth Drivers

Impressive first-quarter 2013 results (including an earnings surprise of 3.2% as well as strong capital and profitability ratios) and solid capital deployment activities were the primary growth drivers for State Street.

On Apr 19, State Street reported first-quarter 2013 earnings of 96 cents per share, surpassing the Zacks Consensus Estimate of 93 cents and the prior-quarter earnings of 84 cents. Better-than-expected results came on the back of an increase in fee income, partially offset by higher operating expenses and a decrease in net interest income.

As of Mar 31, 2013, total assets under custody and administration were $25.42 trillion, up nearly 9.5% year over year and 4.3% sequentially. Moreover, State Street’s total assets under management came in at $2.18 billion, up 9.9% from the last-year quarter and 4.3% from the prior quarter.

Estimate Revisions Show Strength

For State Street, over the last 30 days, 8 of the 16 estimates for 2013 have been revised upward, raising the Zacks Consensus Estimate by 1% to $4.47 per share. For 2014, 4 of the 16 estimates moved north, helping the Zacks Consensus Estimate inch up 1% to $5.09 per share.

Better performing banks include Fifth Third Bancorp (FITB - Analyst Report), JPMorgan Chase & Co. (JPM - Analyst Report) and Zions Bancorp. (ZION - Analyst Report), all of which carry a Zacks Rank #2 (Buy).

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