State Street: Keefe, Bruyette & Woods raises PT to $135 from $132.

State Street: Keefe, Bruyette & Woods raises PT to $135 from $132.

State Street Corporation (NYSE: STT) has seen its stock price target raised by Keefe, Bruyette & Woods (KBW) from $132 to $135, reflecting a positive outlook on the company's financial performance and growth prospects. The upgrade comes amidst a period of robust earnings growth and increased fee revenue, driven by strong market conditions and strategic initiatives.

The third-quarter results, reported on September 12, 2025, showed adjusted earnings per share of $2.78, surpassing the analyst consensus estimate of $2.61. Quarterly sales reached $3.545 billion, up 9% year-over-year (Y/Y), also exceeding analyst expectations. Fee revenue increased by 8% Y/Y, with notable growth in management fees (16%), servicing fees (7%), and FX trading services (11%). Despite a decline in other fee revenue, adjusted for notable items, it rose by $20 million, according to a State Street profit report.

Net interest income fell by 1% Y/Y to $715 million, primarily due to lower average short-end rates and a shift in the deposit mix. Total expenses increased by 5% Y/Y, driven by higher investments in technology and business capabilities. Investment Management AUM surged by 15% Y/Y to $5.4 trillion, reflecting higher market levels and net inflows.

State Street ended the quarter with a standardized common equity tier 1 (CET1) ratio of 11.3%, down 30 basis points from the prior year but up 60 basis points from the previous quarter. The company returned $637 million to shareholders, including $400 million in share buybacks and $237 million in dividends.

CEO Ron O’Hanley highlighted the company's focus on innovation and client capabilities, noting the advancement of the Wealth Services strategy through a partnership with Apex Fintech Solutions. The Investment Management business launched 39 new products, underscoring the company's commitment to differentiated client solutions, as noted in the report.

The stock price of STT shares traded lower by 4.38% to $108.00 at last check on Friday, following the earnings report. Despite the price drop, the upgrade by KBW reflects the positive sentiment surrounding State Street's performance and growth prospects.