State Street (STT) Stock Forecast & Price Target

State Street's strong financial position is underscored by its substantial assets under custody and administration, which amount to approximately $47 trillion, along with $4.7 trillion in assets under management, setting the foundation for robust revenue generation. The company's higher equity exposure relative to peers enhances its revenue prospects, particularly as market conditions favor rising custody and asset management revenues, supported by current equity market levels. Additionally, the anticipated growth in earnings per share, projected to resume in 2025 and accelerate in 2026, reflects State Street’s favorable positioning in a potentially prolonged high-interest-rate environment, further contributing to a positive outlook for the firm.

State Street's stock outlook is negative primarily due to its significant underperformance compared to the broader banking sector, with a 16% lag behind the BKX index, and currently trading at a 10-year low relative to the G-SIB group. The company is experiencing lower revenue forecasts, particularly in net interest income and servicing fees, compounded by a higher share count resulting from management's payout strategy adjustment from an anticipated 100% to approximately 80%. Furthermore, potential risks such as macroeconomic dislocations, organic growth challenges, and increased expenses without corresponding revenue growth are likely to exacerbate these financial challenges.