Bull’s Eye Report: State Street Corporation (STT)

Will State Street Corporation (NYSE:STT) rip to new highs anytime soon? Who knows, but much of it depends on what analysts believe and what action the company’s insiders pursue. The stock closed higher on 14 March. The shares accumulated 0.44 points or 0.63 percent at $70.29 with a light trade volume of 1.915 million shares. After opening the session at $69.88, the shares went as high as $70.72 and as low as $69.77, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $26.7 billion and now has 380.22 million shares outstanding. State Street Corporation (STT) stock has gained 1.12 percent of market value in 21 trading days.

STT stock has a trailing 3-year beta of 1.42, offering the possibility of a higher rate of return, but also posing more risk. The portion of a company’s profit allocated to each outstanding share of common stock was $6.33 a share in the trailing twelve months. The stock’s value has surged 11.45 percent year to date (YTD) against a decline of -34.51 percent in 12 month’s time. The company’s shares still trade -35.16 percent away from its 1-year high of $108.41 and 21.46 percent up from 52-week low of $57.87. The average consensus rating on the company is 2.3, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.

State Street Corporation (STT) will probably climb 14.04 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $98-month high price target. This represents a whopping 39.42 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $78.5, which represents a return potential of 11.68 percent when compared to the closing price of the stock of $70.29 on Thursday, March 14. The lowest price target for the stock is $69 — slightly more than -1.84 percent from STT’s current share price.

History has shown that shares in State Street Corporation have gone down on 7 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. Investors will get their next glimpse of STT’s Q1 earnings on April 26. Analysts are forecasting revenue to suffer decline of -3.3 percent to $2.92B in the fiscal first quarter, while earnings are seen soaring by nearly -22.84 percent to $1.25 per share. It earned $1.68 per share, better than the $1.67, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.99B, better than the $2.98B analysts expected. Earnings are estimated to increase by 6.7 percent this year, 12.67 percent next year and continue to increase by 5.98 percent annually for the next 5 years.

The stock is currently hovering around the first support level of $69.8. Below this, the next support is placed in the zone of $69.31. Till the time, the STT stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 50.62 on daily chart, which may remain a cause for concern. If the price breaks below $69.31 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $70.75 mark may result into a pull-back move towards $71.21 level.

Shares of State Street Corporation (STT) are trading at a P/E ratio of 11.03 times earnings reported for the past 12 months. The industry STT operates in has an average P/E of 20.51. Its P/E ratio went as low as 9.99X and as high as 17.32 over the 5-year span.Further, it is sporting a 7.31 on the Price-to-Sales ratio. Compare this with the industry average P/S of 8.88.