BNY Mellon
Bank of New York Mellon Corp. (NYSE: BK) has dropped about 4.4% from its share price over the past 12 months. Like other banks, the stock tumbled after the bank crisis of early March. Until then, the shares were up more than 40% over the past six months. For that period, the stock is still up nearly 26%. A looming recession could have a smaller impact on the bank because most of its revenue is derived from service fees for its custody services. Rising interest rates also could help revenue by allowing the bank once again to charge management fees for its handling of money market funds.
Of the 18 analysts covering the stock, 10 have a Buy or Strong Buy rating and seven rate it at Hold. The median price target on the stock is $55.00, and at a recent price of around $46.20, the upside potential is around 19%. At the high target of $62.00, the potential upside is 34.2%.
First-quarter revenue is forecast at $4.4 billion, up 12.4% sequentially and nearly 12% higher year over year. Adjusted EPS are expected to come in at $1.11, down 14.6% sequentially but 18.1% higher year over year. For the full 2022 fiscal year, analysts forecast EPS of $4.91, up 7%, on revenue of $17.74 billion, up 8.3%.
The stock trades at 9.4 times expected 2023 EPS, 8.8 times estimated 2024 earnings of $5.22 and 8.4 times estimated 2025 earnings of $5.51 per share. The stock’s 52-week range is $36.22 to $52.26. BNY Mellon pays an annual dividend of $1.48 (yield of 3.23%). Total shareholder return for the past 12 months was negative 1.22%.
Goldman Sachs
Goldman Sachs Group Inc. (NYSE: GS) has posted a 12-month share price increase of about 3.2%, turning around a 12-month drop of 5.2% at the end of the December quarter. Given the bank’s dependence on investment banking services for IPOs, mergers and acquisitions (of which there were few in the first quarter), the bank could take another hit to profits. Trading revenue is likely to be higher, but probably not high enough to cover the arid deal landscape.
Of the 25 analysts covering the firm, 16 have a rating of Buy or Strong Buy, and eight more have Hold ratings. At a share price of around $332.10, the upside potential based on a median price target of $390.00 is 17.4%. At the high price target of $460.00, the implied upside is 38.5%.
First-quarter revenue is forecast to come in at $12.66 billion, up 19.5% sequentially but a drop of 2.1% year over year. Adjusted EPS are forecast at $8.06, up 142.7% sequentially but down 33.0% year over year. The current estimates for the 2023 fiscal year call for revenue of $49.44 billion, up 4.4%, and EPS of $31.75, up 5.6%.
Goldman stock trades at 10.6 times expected 2023 EPS, 8.7 times estimated 2024 earnings of $38.60 and 8.0 times estimated 2025 earnings of $42.40 per share. The stock’s 52-week range is $277.84 to $389.58. Goldman pays an annual dividend of $10.00 (yield of 3.01%). Total shareholder return for the past 12 months was 7.62%.
Originally published at 24/7 Wall St.
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