Core Insights - The Bank of New York Mellon Corporation (NYSE:BK) is set to release its third-quarter earnings results on October 16, with analysts expecting earnings of $1.77 per share, an increase from $1.52 per share in the same period last year [1] - The projected quarterly revenue for BNY Mellon is $4.98 billion, up from $4.65 billion a year earlier [1] Financial Activities - On September 3, BNY Mellon announced a public offering of $500 million in depositary shares representing interests in preferred stock [2] - The stock price of Bank of New York Mellon increased by 0.8%, closing at $107.11 on a recent Tuesday [2] Analyst Ratings - Goldman Sachs analyst Alexander Blostein maintained a Buy rating and raised the price target from $106 to $120 [4] - BMO Capital analyst Brennan Hawken initiated coverage with an Outperform rating and a price target of $125 [4] - Truist Securities analyst David Smith maintained a Hold rating and increased the price target from $109 to $118 [4] - Evercore ISI Group analyst Glenn Schorr maintained an In-Line rating and raised the price target from $91 to $110 [4] - Citigroup analyst Keith Horowitz maintained a Neutral rating and increased the price target from $92 to $105 [4]

Core Insights - Energy and Financial sectors dominate the deep-value landscape, with Petrobras (PBR) and Equinor (EQNR) leading in Energy, while Synchrony Financial (SYF) and Bank of New York Mellon (BK) are at the forefront of Financials [1][2][5] Energy Sector - Petrobras (PBR) trades at an Acquirer's Multiple (AM) of 4.0 with a free cash flow (FCF) yield of approximately 38.1%, reflecting macro and political risks rather than deteriorating fundamentals [2] - Equinor (EQNR) has an AM of 2.5 and a FCF yield of around 12.3%, indicating strong cash generation despite market skepticism [2] - The broader energy complex continues to offer double-digit cash returns at low- to mid-single-digit AMs, highlighting ongoing doubts about the sustainability of oil and gas profitability [3] Financial Sector - Bank of New York Mellon (BK) has an AM of 2.1 and a FCF yield of about 3.2%, while Synchrony Financial (SYF) shows a higher AM of 2.2 with a remarkable FCF yield of approximately 37.9% [1][2] - The market remains cautious regarding credit and capital markets exposure, impacting valuations in the financial sector [1] Market Sentiment - Investors are discounting cyclical exposure and macro sensitivity over underlying cash strength, with Energy priced as a sunset sector despite strong capital discipline and high free cash flow [4] - The clustering of Energy and Financials suggests that patient capital may find opportunities through buybacks, dividends, and resilient earnings if pessimism proves excessive [4] Investment Outlook - The current market setup indicates that Energy and Financials are central to global value, with disciplined capital allocation, attractive valuations, and strong FCF yields rewarding long-term investors willing to endure volatility [5]

Core Viewpoint - Analysts forecast that The Bank of New York Mellon Corporation (BK) will report quarterly earnings of $1.75 per share, reflecting a year-over-year increase of 15.1%, with anticipated revenues of $4.95 billion, up 6.5% from the previous year [1]. Earnings Projections - The consensus EPS estimate has been revised upward by 0.3% in the past 30 days, indicating a reassessment by covering analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts project 'Revenue- Market and Wealth Services- Total revenue' to reach $1.70 billion, a 10.3% increase year-over-year [5]. - The estimate for 'Revenue- Securities Services- Total fee and other revenue' is $1.71 billion, suggesting a 6.3% year-over-year change [5]. - 'Revenue- Securities Services- Net interest income' is expected to be $652.08 million, reflecting a 7.1% increase year-over-year [6]. - The total revenue for 'Securities Services' is projected at $2.36 billion, indicating a 6.5% increase from the prior year [6]. Key Financial Metrics - The 'Tier 1 Leverage Ratio' is expected to remain at 6.0%, consistent with the same quarter last year [7]. - The estimated 'Total interest-earning assets - Average balance' is $369.21 billion, up from $356.93 billion in the same quarter last year [7]. - Analysts predict 'Book value per common share' will reach $54.88, compared to $51.78 in the same quarter last year [8]. - The consensus for 'Tier 1 Capital Ratio (Standardized Approach)' is 13.3%, down from 14.5% in the same quarter last year [8]. Nonperforming Loans and Assets - 'Total Nonperforming Loans' are expected to reach $242.13 million, up from $211.00 million in the same quarter last year [9]. - 'Assets under management - Total' is projected at $2152.86 billion, slightly up from $2144.00 billion year-over-year [9]. - 'Nonperforming Assets' are anticipated to be $243.13 million, compared to $211.00 million in the previous year [9]. Capital Ratios - The 'Total Capital Ratio (Standardized Approach)' is expected to be 15.1%, down from 15.6% in the same quarter last year [10]. Stock Performance - Over the past month, The Bank of New York Mellon shares have recorded a return of -1.8%, while the Zacks S&P 500 composite has changed by +0.4% [11].

Core Insights - The market is closely monitoring trade policy developments following President Trump's response to China's rare earth export curbs with higher tariffs [1] - A federal government shutdown may delay the release of key economic reports, but corporate earnings from major banks and semiconductor companies are anticipated [1][3] Corporate Earnings - Major financial firms such as JPMorgan Chase, Wells Fargo, Goldman Sachs, and American Express are set to report earnings this week [2][5] - TSMC, the world's largest chip manufacturer, is expected to report a 40% revenue growth in the first half of 2025 due to strong AI chip sales [7] - Other financial institutions reporting include BlackRock, CitiGroup, Bank of America, and Morgan Stanley throughout the week [6] Economic Data and Federal Reserve - The ongoing government shutdown is likely to extend the blackout on economic data releases, affecting reports on retail sales, jobless claims, and housing starts [3][8] - Federal Reserve officials, including Chair Jerome Powell, are scheduled to speak, coinciding with the release of the Beige Book economic update [9] Key Events and Conferences - Oracle's AI World conference begins on Monday, while Salesforce's Dreamforce event starts on Tuesday [7] - The bond market will be closed on Monday for Columbus Day, but major stock exchanges will remain open [4]

Core Viewpoint - The Bank of New York Mellon Corporation (BK) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, continuing a trend of positive earnings surprises [1]. Earnings Performance - The company has a strong history of beating earnings estimates, with an average surprise of 8.77% over the last two quarters [2]. - In the last reported quarter, BK achieved earnings of $1.94 per share, exceeding the Zacks Consensus Estimate of $1.74 per share by 11.49%. In the previous quarter, it reported earnings of $1.58 per share against an expectation of $1.49 per share, resulting in a surprise of 6.04% [3]. Earnings Estimates - Recent changes in earnings estimates for BK have been favorable, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5]. - The current Earnings ESP for BK is +1.07%, suggesting that analysts are optimistic about its near-term earnings potential. This positive ESP, combined with a Zacks Rank of 3 (Hold), indicates a potential for another earnings beat [8]. Predictive Metrics - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [6]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which may be more accurate [7].

Core Points - Canadian Banc Corp. has successfully completed an overnight offering of Preferred Shares, raising total gross proceeds of $62.7 million [1] - The Preferred Shares will trade on the Toronto Stock Exchange under the symbol BK.PR.A [1] Investment Portfolio - The net proceeds from the offering will be invested in a portfolio primarily consisting of six publicly traded Canadian banks: Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, The Bank of Nova Scotia, National Bank of Canada, and The Toronto-Dominion Bank [2] Investment Objectives - The investment objectives for the Preferred Shares include providing holders with cumulative preferential floating rate monthly cash dividends at a rate per annum equal to the prevailing Canadian prime rate plus 1.50%, with a minimum annual rate of 5.0% and a maximum annual rate of 8.0% based on the original $10 issue price [3] - On or about the termination date, currently set for December 1, 2028, the company aims to pay holders the original $10 issue price of those shares, subject to potential five-year extensions [3]

Core Viewpoint - Morgan Stanley has adjusted its model for North American large banks' Q3 2025 performance forecasts, indicating a mild impact on EPS growth of 0-1% and a median EPS estimate 3% higher than market consensus [1][2] Group 1: Earnings Forecasts - The median EPS forecast for North American banks in Q3 2025 is 3% above market consensus, with the largest increases expected for money center banks and State Street Bank (STT.US) [1] - Citigroup (C.US) is projected to have an EPS of $1.99, exceeding the market consensus of $1.83 by 9% [1] - Bank of America (BAC.US) is expected to report an EPS of $1.01, which is 7% higher than the consensus of $0.94 [1] - State Street Bank's EPS is forecasted to be 6% above consensus, while Northern Trust (NTRS.US) is expected to be 3% higher [1] - Most super-regional banks are projected to be 1-3% above consensus, with Truist Financial (TFC.US) and Wells Fargo (WFC.US) both expected to be 3% higher [1] Group 2: Key Financial Metrics - The model incorporates a macro assumption of an additional 125 basis points rate cut by the end of 2026, with a focus on Citigroup, Bank of America, Goldman Sachs, and JPMorgan Chase (JPM.US) due to expected outperformance in investment banking fees and trading income [2] - Money center banks are expected to lead in asset growth, with JPMorgan Chase's average total assets projected to reach $4.43 trillion, an 8.4% year-over-year increase, and Bank of America expected to reach $3.47 trillion, a 5.5% increase [2] - The deposit structure shows a gradual decline in non-interest-bearing deposits, with Bank of America projected to have 26.0% in 2025, down from 26.7% in 2024 [2] - The net interest margin (NIM) is expected to remain stable, with a median estimate of 2.50% for 2025, while super-regional banks are projected to have higher NIMs [2] Group 3: Revenue Growth Drivers - Fee income is a core growth driver, with M&A fees expected to grow 30% year-over-year, significantly above the consensus growth of 11% [3] - Equity Capital Markets (ECM) fees are projected to increase by 41%, compared to a consensus of 30%, while Debt Capital Markets (DCM) fees are expected to grow by 4% against a consensus of 3% [3] - Money center banks like JPMorgan and Goldman Sachs are expected to see over 9% year-over-year growth in fee income for 2025 [3] Group 4: Capital Returns - The median dividend payout ratio for banks in 2025 is expected to be around 30%, with money center banks showing a slight decrease from 27% to 29% [3] - JPMorgan is projected to pay $5.80 per share in dividends, while Citigroup is expected to pay $2.32 per share [3] - Stock buybacks are anticipated to increase significantly, with JPMorgan expected to repurchase $38.01 billion in 2025, up from $18.84 billion in 2024, and Citigroup expected to repurchase $13.47 billion, a substantial increase from $2.5 billion in 2024 [3] Group 5: Overall Outlook - The report maintains a cautiously optimistic view on North American large banks, suggesting that money center banks will outperform due to investment banking and trading income, while super-regional banks show stable asset quality [4] - Trust banks are expected to face pressure on net interest margins but still demonstrate resilience supported by fee income [4]

Core Insights - The Bank of New York Mellon Corp. (BK) is exploring tokenized deposits to modernize its payment network and enhance blockchain usage in global finance [1][8] - The initiative aims to facilitate real-time, instant, and global transactions across BK's international network [2] Rationale Behind BNY Mellon's Move - Tokenized deposits serve as a digital representation of customer deposits, enabling quick transfers and real-time settlement without intermediary delays [3] - This approach aims to help banks overcome legacy technology constraints, improving deposit and payment efficiency [3] Payment Volume and Benefits - BNY Mellon's treasury services division processes nearly $2.5 trillion in payments daily, with tokenized deposits expected to make these transactions cheaper, faster, and available 24/7 [4] Broader Blockchain Strategy - The move aligns with BK's broader blockchain strategy, including a collaboration with Goldman Sachs to use blockchain for money market fund ownership records [5] - BK is also part of over 30 financial institutions working with SWIFT on a blockchain-based shared ledger for real-time cross-border payments [5] Price Performance - Over the past six months, BK shares have increased by 34.8%, outperforming the industry growth of 26.2% [6] Industry Comparisons - Other major banks are also pursuing similar initiatives, such as HSBC expanding its tokenized deposit service for corporate clients to enable real-time currency transfers [10] - JPMorgan has partnered with Coinbase to facilitate direct crypto purchases and enhance compliance and security in fiat-to-crypto transactions [12][13]

Core Insights - The current investment landscape highlights persistent skepticism towards the Energy and Financial sectors, which are identified as undervalued [1] Financial Sector Summary - Bank of New York Mellon (BK) has an Acquirer's Multiple (AM) of 2.1 and a free cash flow (FCF) yield of 3.2%, while Synchrony Financial (SYF) shows an AM of 2.2 and an exceptional FCF yield of 37.2%, indicating a strong deep-value case in financials despite market concerns over credit and interest-rate risks [2] - The market's pricing reflects ongoing credit and interest-rate risks, which disciplined value investors may view as opportunities [2] Energy Sector Summary - Petrobras (PBR) trades at an AM of 4.1 with a 36.4% FCF yield, and Equinor (EQNR) has an AM of 2.7 with an 11.4% FCF yield and a near-double-digit dividend payout, showcasing a disconnect between strong cash generation and market doubts about fossil fuel demand [3] - Both Petrobras and Equinor maintain strong balance sheets and shareholder distributions, yet their valuations remain low [3] Healthcare Sector Summary - Molina Healthcare (MOH) appears with an AM of 6.0 and a 3.9% FCF yield, indicating consistent profitability and steady operating income growth, which is appealing in uncertain markets [4] Market Implications - The convergence of multiple sectors at the top of value screens signals broad-based pessimism regarding future earnings durability, particularly in Energy and Finance due to transition risks and credit concerns [5] - The presence of a healthcare company suggests selective investment opportunities beyond typical cyclical sectors [5] Conclusion - The value landscape is dominated by Energy and Financials, which offer high free cash flow and strong capital returns amidst market skepticism, presenting opportunities for patient contrarian investors [6] - Select healthcare names provide diversification, indicating fertile ground for disciplined value seekers in a cautious market environment [6]

Core Insights - Bank of New York Mellon Corp. is testing tokenized deposits to modernize its payments infrastructure and expand blockchain use in global finance [1] - The initiative aims to facilitate blockchain-based payments using tokenized versions of traditional deposits [1][3] Group 1: Project Overview - The project supports real-time, instant, and cross-border transactions across BNY Mellon's global network [2] - BNY Mellon's treasury services division processes approximately $2.5 trillion in payments daily [3] Group 2: Technology and Benefits - Tokenized deposits serve as digital representations of cash held at commercial banks, enabling instant transfers and real-time transaction settlements [4] - This technology is expected to make payments cheaper, faster, and available 24/7 [4] Group 3: Industry Context - BNY Mellon's move aligns with growing blockchain adoption among major financial institutions, with JPMorgan and HSBC also launching similar initiatives [5] - Several European banks are exploring fiat-linked stablecoins, indicating a trend towards modernizing the global payments ecosystem [6] Group 4: Regulatory Environment - The acceleration of blockchain adoption in traditional finance is influenced by emerging regulatory clarity in the U.S. and Europe [7]