BK Stock Forecast & Price Target

Bank of New York Mellon (BNY) reported a year-over-year revenue increase of 13% in its Markets and Wealth Services segment, driven by strong servicing fees and a 5% quarter-over-quarter rise in assets under custody/administration (AUC/A). The bank's asset management fees also exceeded expectations, contributing to a significant rebound in pretax margins from 8% to 19%, while near 28% return on tangible common equity (ROTCE) further underscores its financial health. With positive forecasts indicating 9% earnings per share (EPS) growth in 2025 and 11% in 2026, BNY is well-positioned to capitalize on higher AUC/A and assets under management (AUM) amid steady client activity.

The negative outlook on Bank of New York Mellon's stock is primarily influenced by several macroeconomic and market-related risks, including the potential for macroeconomic dislocation, geopolitical events, and downturns in equity and fixed income markets, which could disproportionately affect the bank’s performance. Additionally, concerns about lower operating leverage and the possibility of increased expenses outpacing revenues further exacerbate the risk profile, particularly given that BNY is less likely to benefit from prolonged high interest rates due to its balance sheet structure. Finally, anticipated normalization of balance sheets and decreased capital markets activity pose further challenges, suggesting a fragile operational environment for the bank moving forward.