On October 17, 2025, Barclays maintained its "Overweight" rating for Bank of New York Mellon (NYSE:BK), with a recommendation to "hold" the stock. At the time, BK's stock price was $106.72. Barclays also increased its price target for BK from $104 to $120, indicating confidence in the company's future performance.
BNY Mellon reported a 25.7% increase in third-quarter earnings, driven by stronger fee income and higher net interest income. The company's adjusted earnings per share (EPS) reached $1.91, surpassing the Zacks Consensus Estimate of $1.76. This performance represents an earnings surprise of 8.52%, as highlighted by Zacks. Total revenues for the quarter increased by 9.3% year over year, amounting to $5.08 billion. This growth was supported by a 10.9% rise in assets under custody and/or administration (AUC/A), reaching $57.8 trillion.
However, there was a slight decline in assets under management (AUM) due to net outflows, which remains a challenge for the company. Despite these positive results, rising expenses posed a challenge for BNY Mellon. The company's core custody and market services divisions are showing robust growth and expanding margins. However, its investment management sector is underperforming due to weak fund flows, as highlighted by Seeking Alpha.
Over the past year, BK's stock has increased by 40%, fueled by market gains, higher interest rates, and strong cost management. The company maintains a strong balance sheet, supporting aggressive stock buybacks and a secure 2% dividend. There is potential for further capital returns if regulatory conditions become more favorable.
