What's Next For STT Stock?

Core Viewpoint - State Street Corporation (STT) reported better-than-expected Q4 2024 results, with stock performance gaining approximately 30% since early 2024, although it underperformed compared to Bank of New York Mellon, which increased over 60% during the same period [1] Financial Performance - Total revenue reached $3.4 billion, reflecting a 12$2.46 per share [2] - Fee revenue rose by 13%, while net interest income increased by 10% [2] - Assets under management grew by 15% year-over-year to $4.71 trillion, driven by higher market levels and quarterly net inflows [2] - Assets under custody also increased by 11$46.6 trillion [2] - Adjusted pre-tax margins improved to 29.8%, up nearly 280 basis points from the previous year [2] - The company is focusing on cost-cutting and higher-margin businesses, benefiting from operating leverage due to a high fixed-cost structure [2] Stock Performance and Market Trends - STT stock has shown volatility over the past four years, with returns of 31% in 2021, -14% in 2022, 4% in 2023, and 30% in 2024 [3] - The Trefis High Quality Portfolio has outperformed the S&P 500 with less volatility, indicating a more stable investment option [3] - The current macroeconomic environment, influenced by the U.S. election results and potential deregulation under the Trump administration, may positively impact banks like STT by reducing compliance costs and enhancing profitability [3] - The end of quantitative tightening by the U.S. Federal Reserve could improve liquidity, benefiting custody banks as asset prices and investment activities may increase with easing interest rates [3] Valuation - STT stock is valued at approximately $90 per share, slightly below the current market price [3]