State Street Added To Goldman's Conviction List

State Street CorpSTT

Goldman Sachs' Alexander Blostein also maintains a Buy rating on State Street's stock with a price target boosted from $92 to $100 which implies a 14 percent upside from current levels.

3 Catalysts To Boost Stock To Price Target

1. Better Mix Shift: State Street's fee growth is poised to accelerate due to a better mix shift, Blostein noted. Specifically, better performing equities in emerging markets and growth in European and U.K. funds could drive improve fee rates for State Street's servicing fees by 4.6 percent quarter-over-quarter. State Street could also see continued positive momentum in its exchange-traded funds franchise, which will help improve the firm's blended AUM (assets under management) fee rate.

2. Short-Term Rates: Short-term rates continue to improve with the three-month LIBOR higher by 12 basis points quarter-over-quarter in the second quarter, the analyst continued. As such, State Street is expected to guide up its $2.3 billion NIR estimate for the year and could accelerate by 10 percent year over year in 2018, which is ahead of the Street's consensus estimate of just 5 percent. 3. Conservative Margin Targets: Finally, the analyst is estimating Street State's pre-tax margins can hit its 31 percent target for 2018 on cost cutting initiatives alone. But higher NIR and market tailwinds could generate a martin rate of 33 percent. Related Links: 22 Stocks Moving In Wednesday's Pre-Market Session Economic Data Scheduled For Wednesday