Bank of America Securities analyst Michael Carrier raised his rating on Bank of New York Mellon (BK) from ”Underperform” to ”Buy”, while citing favorable revenue and earnings outlook.
The firm also raised its 12-month price target on the stock from $43 to $50, which compares with a median price target of $49.00.
According to Carrier, Bank of New York Mellon is well positioned for interest rate hikes, especially rising short-term rates, which will positively affect both its net interest income and money market fee waiver outlook.
“Despite the near term low short rate headwinds, we expect the combination of rising rates, strategic initiatives, and active expense/capital management to drive stronger revenue and earnings growth over the next few years,” BofA Securities’ Michael Carrier wrote in an investor note.
The shares of BNY Mellon Corp closed higher for the fifth time in the past ten trading sessions in New York on Wednesday. It has also been the sharpest single-session gain since March 12th. The stock went up 1.98% ($0.88) to $45.25, after touching an intraday high at $46.04, or a price level not seen since March 19th ($46.71).
The shares have risen 6.62% so far in 2021 compared with a 3.54% gain for the benchmark index, S&P 500 (SPX).
In 2020, BNY Mellon Corp’s stock went down 15.68%, thus, it underperformed the S&P 500, which registered a 16.26% gain.