BNY Mellon offers 'prolonged double-digit annual earnings per share growth': analyst

By Steve Gelsi

Deutsche Bank upgrades Bank of New York Mellon to buy from hold and sets a price target of $80 a share

Bank of New York Mellon Corp.'s stock has drawn an upgrade to buy from Deutsche Bank analyst Brian Bedell on prospects for the financial giant to offer double-digit annual percentage growth in earnings per share at least through 2026.

Bedell said BNY Mellon (BK) "offers more upside potential than downside risk" and should command a higher stock-market valuation.

He cited three main examples of the company's strengths, led by an emerging platform business model to provide more services to existing clients.

BNY Mellon is also poised to offer product innovations that "should add incremental revenue streams," he wrote.

Finally, Bedell highlighted BNY Mellon's array of businesses that should benefit from more robust capital markets in a time of falling interest rates.

As one of the largest U.S. financial firms, with a market capitalization of $53 billion, the bank offers "some downside protection in adverse macro scenarios," Bedell said.

BNY Mellon has already booked four years in a row of earnings-per-share growth of 10% or more, he said.

Bedell's price target of $80 a share for the bank is based on a 45% discount to the S&P 500 SPX, a richer valuation than his previous discount of 50%.

BNY Mellon's stock has risen 38.5% in 2024, outpacing the roughly 19.8% gain by the S&P 500.

-Steve Gelsi

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09-24-24 1036ET

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