UPDATE: Jefferies Raises PT on State Street to $42

Jefferies is out with its report today on State Street (NYSE: STT), raising its PT from $38 to $42.

In its report, Jefferies writes, "We raise EPS ests. after 3Q results beat on custody and FX, with costs also kept in check. While some revenue run-rates face tough comps, core custody momentum and faster cost save recognition should deliver modest EPS growth in 2012 (to $3.80) over the $0.92 core EPS run-rate for 3Q. We feel better about revision risks and see stock price upside, with the forward P/E vs. the market our biggest holdback given the volatile environment. We establish a $42 price target by applying an 11x multiple to our 2012 EPS estimate."

Jefferies maintains Hold on STT.

At the time of posting, shares of STT were trading at $37.76, up 0.72% from Tuesday's close.