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State Street Corporation (STT - Free Report) shares have rallied 13.3% so far this year, outperforming the industry’s 6.3% growth and the S&P 500 Index’s 9.5% rise. Moreover, STT’s price performance has been better than that of its close peers, BankUnited, Inc. (BKU - Free Report) and Fifth Third Bancorp (FITB - Free Report) . Shares of BankUnited have lost 2.1%, while the Fifth Third stock has gained 1.2% in the same time frame.
YTD Price Performance of STT
Image Source: Zacks Investment Research
Let us decipher whether it makes sense to add the STT stock to your portfolio now, given the recent increase in price.
Factors Supporting State Street’s Growth
Restructuring/Inorganic Expansion Efforts: State Street has been expanding its scale by undertaking strategic acquisitions and business expansion efforts. In May 2025, it collaborated with smallcase to cater to investors in India seeking global exposure. In April, STT partnered with Ethic Inc. to offer customized investment solutions to institutional and financial intermediary clients. In February, it announced a deal to acquire global custody and related businesses outside of Japan from Mizuho Financial Group, Inc.
In November 2024, State Street Global Advisors joined forces with Bridgewater Associates to boost its core alternative investment strategies, while, in September, STT partnered with Apollo Global to enhance investors' accessibility to private markets. Further, State Street announced the acquisition of a 5% stake in Australia-based Raiz Invest Limited, a strategic partnership with Taurus and the completion of the buyout of CF Global Trading.
As part of its business consolidation efforts, State Street announced the restructuring of the nearly 20-year-old European component of the International Financial Data Services LP joint venture (JV) arrangement in Luxembourg and Ireland, consolidated its India-based operations and assumed full ownership of its two JVs.
The above-mentioned initiatives, along with the company’s past buyouts, are expected to result in revenue and cost benefits, and help STT expand its footprint globally. The Zacks Consensus Estimate for State Street’s 2025 revenues is pegged at $13.68 billion, which suggests year-over-year growth of 4.6%.
Sales Growth Estimates
Image Source: Zacks Investment Research
Fee Income Strength: Growth in State Street’s fee income has been impressive. While total fee revenues declined in 2022 and 2023, the metric saw a four-year (2020-2024) compound annual growth rate (CAGR) of 1.7%, with the uptrend continuing in the first half of 2025. The rise was mainly driven by higher client activity and significant market volatility.
STT’s assets under custody and administration (AUC/A) and assets under management (AUM) saw a four-year (ended 2024) CAGR of 4.7% and 8%, respectively, with the upward momentum continuing in the first six months of 2025.
Given its global exposure and a broad array of innovative products and services (including the launch of State Street Digital and State Street Alpha), STT is well-positioned for fundamental business activities. Supported by the company’s business servicing wins and an inorganic growth strategy, its fee revenues are expected to witness further growth. Management expects total fee revenues (excluding notable items) to increase 5-7% year over year in 2025.
Relatively Higher Interest Rates: In the current high-interest-rate backdrop, State Street has been witnessing an increase in net interest income (NII). In the past four years (ended 2024), NII saw a CAGR of 7.4%. Because of rising funding costs and shrinking non-interest-bearing deposit balances, the company’s net interest margin (NIM) contracted to 1.10% in 2024 from 1.20% in 2023. Nevertheless, given the company’s investment portfolio repositioning efforts, its NII and NIM are expected to be positively impacted in the near term. We expect NII to witness a CAGR of 1.3% by 2027.
Analyst Sentiments Bullish for STT
Over the past 30 days, the Zacks Consensus Estimate for State Street’s 2025 and 2026 earnings has been revised 1.1% and marginally upward, respectively. This reflects that analysts are optimistic regarding STT’s earnings growth potential.
Moreover, 2025 and 2026 earnings estimates of $9.82 per share and $10.78 indicate year-over-year growth rates of 13.3% and 9.8%, respectively.
Earnings Estimates
Image Source: Zacks Investment Research
Is it Wise to Add STT Stock to Your Portfolio Now?
While elevated costs due to continuous investments in franchises and inflationary pressure are expected to hurt State Street's bottom line to some extent in the near term, its solid business servicing wins, global footprint, and strategic buyouts and alliances will continue to aid growth. Moreover, a rising AUM balance is expected to drive STT’s top line and relatively higher interest rates will support NII growth.
In fact, if we look at the stock’s current valuation, it appears to be undervalued than the industry. State Street is currently trading at a forward 12-month price/earnings (P/E) ratio of 10.66, which is below the industry average of 11.23.
STT’s Price-to-Earnings Ratio
Image Source: Zacks Investment Research
BankUnited has a P/E (F12M) ratio of 10.92, while Fifth Third has a P/E ratio of 11.14. Thus, State Street appears to be trading at a discount when compared with its closest peers like BankUnited and Fifth Third.
STT has also been constantly rewarding shareholders with enhanced capital distributions. Following the clearance of the 2025 stress test, State Street increased its quarterly dividend by 11% to 84 cents per share. Before this, the company hiked annual dividends four consecutive times by 10%.
In January 2024, STT was authorized to repurchase shares worth up to $5 billion (with no expiration date). As of June 30, 2025, $3.3 billion worth of authorization remained available.
Given State Street’s fundamental strength, along with its robust earnings and sales growth projections, the stock looks like an attractive investment option right now. Lower valuation than the industry and bullish analyst sentiments are other positives.
Image: Bigstock
State Street Gains 13.3% YTD: Should You Buy the Stock Now?
Key Takeaways
State Street Corporation (STT - Free Report) shares have rallied 13.3% so far this year, outperforming the industry’s 6.3% growth and the S&P 500 Index’s 9.5% rise. Moreover, STT’s price performance has been better than that of its close peers, BankUnited, Inc. (BKU - Free Report) and Fifth Third Bancorp (FITB - Free Report) . Shares of BankUnited have lost 2.1%, while the Fifth Third stock has gained 1.2% in the same time frame.
YTD Price Performance of STT
Image Source: Zacks Investment Research
Let us decipher whether it makes sense to add the STT stock to your portfolio now, given the recent increase in price.
Factors Supporting State Street’s Growth
Restructuring/Inorganic Expansion Efforts: State Street has been expanding its scale by undertaking strategic acquisitions and business expansion efforts. In May 2025, it collaborated with smallcase to cater to investors in India seeking global exposure. In April, STT partnered with Ethic Inc. to offer customized investment solutions to institutional and financial intermediary clients. In February, it announced a deal to acquire global custody and related businesses outside of Japan from Mizuho Financial Group, Inc.
In November 2024, State Street Global Advisors joined forces with Bridgewater Associates to boost its core alternative investment strategies, while, in September, STT partnered with Apollo Global to enhance investors' accessibility to private markets. Further, State Street announced the acquisition of a 5% stake in Australia-based Raiz Invest Limited, a strategic partnership with Taurus and the completion of the buyout of CF Global Trading.
As part of its business consolidation efforts, State Street announced the restructuring of the nearly 20-year-old European component of the International Financial Data Services LP joint venture (JV) arrangement in Luxembourg and Ireland, consolidated its India-based operations and assumed full ownership of its two JVs.
The above-mentioned initiatives, along with the company’s past buyouts, are expected to result in revenue and cost benefits, and help STT expand its footprint globally. The Zacks Consensus Estimate for State Street’s 2025 revenues is pegged at $13.68 billion, which suggests year-over-year growth of 4.6%.
Sales Growth Estimates
Image Source: Zacks Investment Research
Fee Income Strength: Growth in State Street’s fee income has been impressive. While total fee revenues declined in 2022 and 2023, the metric saw a four-year (2020-2024) compound annual growth rate (CAGR) of 1.7%, with the uptrend continuing in the first half of 2025. The rise was mainly driven by higher client activity and significant market volatility.
STT’s assets under custody and administration (AUC/A) and assets under management (AUM) saw a four-year (ended 2024) CAGR of 4.7% and 8%, respectively, with the upward momentum continuing in the first six months of 2025.
Given its global exposure and a broad array of innovative products and services (including the launch of State Street Digital and State Street Alpha), STT is well-positioned for fundamental business activities. Supported by the company’s business servicing wins and an inorganic growth strategy, its fee revenues are expected to witness further growth. Management expects total fee revenues (excluding notable items) to increase 5-7% year over year in 2025.
Relatively Higher Interest Rates: In the current high-interest-rate backdrop, State Street has been witnessing an increase in net interest income (NII). In the past four years (ended 2024), NII saw a CAGR of 7.4%. Because of rising funding costs and shrinking non-interest-bearing deposit balances, the company’s net interest margin (NIM) contracted to 1.10% in 2024 from 1.20% in 2023. Nevertheless, given the company’s investment portfolio repositioning efforts, its NII and NIM are expected to be positively impacted in the near term. We expect NII to witness a CAGR of 1.3% by 2027.
Analyst Sentiments Bullish for STT
Over the past 30 days, the Zacks Consensus Estimate for State Street’s 2025 and 2026 earnings has been revised 1.1% and marginally upward, respectively. This reflects that analysts are optimistic regarding STT’s earnings growth potential.
Moreover, 2025 and 2026 earnings estimates of $9.82 per share and $10.78 indicate year-over-year growth rates of 13.3% and 9.8%, respectively.
Earnings Estimates
Image Source: Zacks Investment Research
Is it Wise to Add STT Stock to Your Portfolio Now?
While elevated costs due to continuous investments in franchises and inflationary pressure are expected to hurt State Street's bottom line to some extent in the near term, its solid business servicing wins, global footprint, and strategic buyouts and alliances will continue to aid growth. Moreover, a rising AUM balance is expected to drive STT’s top line and relatively higher interest rates will support NII growth.
In fact, if we look at the stock’s current valuation, it appears to be undervalued than the industry. State Street is currently trading at a forward 12-month price/earnings (P/E) ratio of 10.66, which is below the industry average of 11.23.
STT’s Price-to-Earnings Ratio
Image Source: Zacks Investment Research
BankUnited has a P/E (F12M) ratio of 10.92, while Fifth Third has a P/E ratio of 11.14. Thus, State Street appears to be trading at a discount when compared with its closest peers like BankUnited and Fifth Third.
STT has also been constantly rewarding shareholders with enhanced capital distributions. Following the clearance of the 2025 stress test, State Street increased its quarterly dividend by 11% to 84 cents per share. Before this, the company hiked annual dividends four consecutive times by 10%.
In January 2024, STT was authorized to repurchase shares worth up to $5 billion (with no expiration date). As of June 30, 2025, $3.3 billion worth of authorization remained available.
Given State Street’s fundamental strength, along with its robust earnings and sales growth projections, the stock looks like an attractive investment option right now. Lower valuation than the industry and bullish analyst sentiments are other positives.
Currently, STT sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.