Analysts at Rafferty Capital Markets upgraded shares of State Street Corp STT to a Buy rating and $82 price target Monday.
Richard Bove highlighted causes for the upgrade:
Analysts find that “An incredible 78.5% of the firm’s owned assets are either in cash or relatively low yielding securities. Low interest rates devastate the returns on these funds.” As interest rates begin to rise, State Streets’ shares become more admirable. Analysts expect interest rates to begin to rise in second quarter 2015.
Bove also noted,”In a higher interest rate environment, the company’s history indicates
that the NIM (net interest margin) could easily be 100 basis points higher. This is $2 billion in pretax earnings or an estimated 100% increase in earnings.”
Shares of State Street Corp closed Mondays session at $70.34 up 0.3 percent.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
date | ticker | name | Price Target | Upside/Downside | Recommendation | Firm |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.