It is a good idea to add State Street (NYSE: STT) stock to your portfolio now as it benefits from solid business servicing wins, strategic acquisitions, global reach and efforts to technologically upgrade operations. Its steady capital distribution activities are likely to continue enhancing shareholder value.
Analysts seem optimistic about the company's earnings growth prospects. Over the past 30 days, the Zacks Consensus Estimate for earnings has been revised marginally upward for 2024 and 2025. The stock currently carries a Zacks Rank #2 (Buy).
So far this year, shares of STT have rallied 3.8%, underperforming the industry's growth of 19.4%.
Image Source: Zacks Investment Research
Here are a few factors that make State Street stock a solid investment option.
Revenue Strength: While the company's net interest revenues (NIR) declined over the past couple of years because of near-zero interest rates, the metric witnessed a three-year (ended 2023) CAGR of 7.8%. Though rising funding costs and shrinking non-interest-bearing deposit balance are expected to weigh on NIR, high interest rates for a longer period are likely to offer some support. We project NIR to be relatively stable in both 2024 and 2025. In 2026, the metric will grow 3.4% year over year.
Likewise, while the company's total fee revenues declined in 2022 and 2023, the same saw a four-year (2019-2023) CAGR of 1%. The company is well-positioned with respect to fundamental business activities, given its global exposure ...
