Keefe Bruyette raises State Street stock price target on buybacks

Keefe, Bruyette & Woods upgraded its price target on State Street stock from $220 to $230, retaining an Outperform rating. Shares saw a 4% decline after falling short of fee-driven revenue expectations, currently trading at $164.83. The company maintained its fee guidance of 13% to 14% and raised net interest income projections for 2026.

State Street reported a 25% return on tangible common equity and a 34.6% pre-tax margin in Q3 2026. Buybacks surged to $400 million in the third quarter, with an expected jump to $700 million in the fourth quarter, according to Keefe Bruyette forecasts. The firm anticipates 6% revenue growth for 2027 when setting the updated price target.

State Street's valuation appears favorable, trading at 10.5 times 2027 estimated earnings, or 13% below its peers. The stock's PEG ratio of 0.45 suggests strong value considering its growth prospects. Shareholders enjoy a 2.21% dividend yield, backed by a 56-year streak of consistent payouts. For comprehensive valuation insights and access to exclusive Pro Research Reports on over 1,400 US equities, visit InvestingPro. State Street is projected to achieve a 24% return on tangible common equity.