UPDATE: Deutsche Bank Initiates Coverage On State Street And Northern Trust

In a note issued Friday, Deutsche Bank initiated coverage of State Street (NYSE: STT) and Northern Trust (NASDAQ: NTRS) with Hold ratings.

In an industry report covering Trust Banks, Deutsche Bank analyst Brian Bedell cites the Hold rating was given because, "Overall, despite relatively inexpensive valuations, we see revenue headwinds persisting throughout at least the remainder of 2014 that will likely drive EPS modestly below Consenus and restrain any significant multiple expansion this year."

Bedell also stated that cyclical and secular challenges persist in asset servicing, these trust banks need their asset management, the sector can be attractive at times and inter-group dynamics offer opportunities.

Bedell has assigned a target price to Northern Trust of $63 and State Street was assigned $67.

State Street closed Thursday at $64.60 and Northern Trust closed at $60.33.