BK Stock Forecast & Price Target

Bank of New York Mellon (BNY) reported a 13% year-over-year increase in Markets and Wealth Services revenues, supported by robust servicing fees and a 5% quarter-over-quarter growth in assets under custody or administration (AUC/A), with a fee rate at 1.90%. The asset management division also demonstrated strength, achieving a significant rebound in pretax margins from 8% to 19%, alongside an uptick in fees exceeding expectations. Overall, the positive outlook is bolstered by improved fee income, rising AUC/A and assets under management (AUM), and projected earnings per share (EPS) growth of 9% in 2025 and 11% in 2026, coupled with impressive return on tangible common equity (ROTCE) and pretax margins.

The analysis suggests a negative outlook on Bank of New York Mellon's stock, primarily due to several macroeconomic and market risks. Key factors cited include potential downturns in fixed income and equity markets, which could adversely affect revenue and operational efficiencies given the bank's significant exposure to trading volumes and capital markets activity. Additionally, concerns over rising expenses in relation to revenues and a less advantageous balance sheet in the context of prolonged higher interest rates further contribute to the pessimistic assessment.