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1. Company Snapshot

1.a. Company Description

The Bank of New York Mellon Corporation provides a range of financial products and services in the United States and internationally.The company operates through Securities Services, Market and Wealth Services, Investment and Wealth Management, and Other segments.The Securities Services segment offers custody, trust and depositary, accounting, exchange-traded funds, middle-office solutions, transfer agency, services for private equity and real estate funds, foreign exchange, securities lending, liquidity/lending services, prime brokerage, and data analytics.


This segment also provides trustee, paying agency, fiduciary, escrow and other financial, issuer, and support services for brokers and investors.The Market and Wealth Services segment offers clearing and custody, investment, wealth and retirement solutions, technology and enterprise data management, trading, and prime brokerage services; and clearance and collateral management services.This segment also provides integrated cash management solutions, including payments, foreign exchange, liquidity management, receivables processing and payables management, and trade finance and processing services.


The Investment and Wealth Management segment offers investment management strategies and distribution of investment products, investment management, custody, wealth and estate planning, private banking, investment, and information management services.The Other segment engages in the provision of leasing, corporate treasury, derivative and other trading, corporate and bank-owned life insurance, renewable energy investment, and business exit services.It serves central banks and sovereigns, financial institutions, asset managers, insurance companies, corporations, local authorities and high net-worth individuals, and family offices.


The company was founded in 1784 and is headquartered in New York, New York.

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1.b. Last Insights on BK

The Bank of New York Mellon Corporation's recent performance was driven by robust earnings growth, strong technicals, and positive momentum. The company's Q3 non-GAAP EPS of $1.91 beat consensus estimates, and revenue grew 9% year-over-year. Management lifted guidance through 2025, citing a strong outlook. The bank's solid capital strength, coupled with a secure 2% dividend yield, supports its "Buy" rating, according to analysts. Institutional investors, such as B. Riley Wealth Advisors and Permanent Capital Management, have recently acquired stakes in the company.

1.c. Company Highlights

2. BNY's Strong Q4 Earnings: A Deeper Dive

BNY reported record net income of $5.3 billion and revenue of $20.1 billion, with a return on tangible common equity of 26%. Total revenue grew 8% year-over-year, driven by a 7% increase in Q4 total revenue to $5.2 billion. Earnings per share (EPS) came in at $2.02, beating estimates of $1.97. The company's pretax margin was strong, and the return on tangible common equity (ROTCE) was 26%, indicating efficient use of capital. The P/E Ratio of 15.78 suggests that the stock is fairly valued relative to its earnings.

Publication Date: Jan -14

📋 Highlights
  • Record Net Income & Revenue Growth: BNY reported $5.3B net income and $20.1B revenue, with 8% total revenue growth and 507 bps of positive operating leverage.
  • AI Adoption & Strategic Collaborations: Launched enterprise AI platform <i>Eliza</i> and partnered with Google Cloud for Gemini Enterprise integration, driving transformational growth.
  • Capital Returns & EPS Growth: Returned $5B to shareholders via dividends and buybacks, with EPS rising 28% YoY to $7.40 and Q4 EPS up 31% to $2.02.
  • Security Services Strength: Revenue surged 7% YoY ($2.5B), with 34% ETF assets under custody/administration (AUC/A) growth and 30% pretax income increase.
  • Medium-Term Financial Targets: Raised pretax margin target to 38% and ROTCE to 28%, alongside 5% revenue growth guidance for 2026 with 5%+ net interest income growth.

Segment Performance

The Security Services segment reported total revenue of $2.5 billion, up 7% year-over-year, driven by an 11% increase in investment services fees. Asset Servicing saw significant growth, with ETF AUC/A rising 34% year-over-year. Markets and Wealth Services reported total revenue of $1.8 billion, up 8% year-over-year, while Investment and Wealth Management reported total revenue of $854 million, down 2% year-over-year. The diverse revenue streams and growth across segments are positives.

Growth Prospects and Guidance

BNY expects 2026 total revenue growth of approximately 5% year-over-year, with net interest income growth slightly ahead of 5% and fees a little lower than 5%. The company has raised its medium-term financial targets, increasing its pretax margin target to 38% and ROTCE target to 28%. The guidance suggests that the company is confident in its ability to continue growing and improving profitability. As Dermot McDonogh noted, the firm aims to outperform these targets, indicating a positive outlook.

Valuation and Dividend Yield

The Price-to-Tangible Book Value (P/TBV) ratio is not directly available, but the P/B Ratio is 0.0, suggesting that the book value might not be a significant concern. However, the Dividend Yield of 1.63% is relatively modest. The EV/EBITDA ratio of 13.16 indicates that the company's enterprise value is reasonable relative to its earnings before interest, taxes, depreciation, and amortization.

Digital Transformation and AI Adoption

BNY is focused on AI adoption and integration, viewing it as a catalyst for transformational change. The company has launched its enterprise AI platform, Eliza, and is collaborating with Google Cloud to integrate Gemini Enterprise capabilities. This strategic focus on technology is expected to drive growth and improve efficiency, potentially leading to higher returns on equity (ROE) in the future, which is currently at 16.97%.

3. NewsRoom

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Meridian Wealth Management LLC Has $1.38 Million Stock Holdings in The Bank of New York Mellon Corporation $BK

10:02

Source: defenseworld.net

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The Bank of New York Mellon Corporation $BK Shares Sold by Principal Financial Group Inc.

08:23

Source: defenseworld.net

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Oakmark U.S. Large Value Strategy Q4 2025 Portfolio Review

Feb -01

Source: seekingalpha.com

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The Fed Paused Rate Cuts. That's Great News for These 2 Financial Stocks

Feb -01

Source: fool.com

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BNY joins Atlassian Williams F1 Team as Official Institutional Banking Partner

Jan -30

Source: prnewswire.com

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FITB or BK: Which Is the Better Value Stock Right Now?

Jan -28

Source: zacks.com

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BNY Aligns Leadership to Accelerate Growth in Wealth Solutions

Jan -27

Source: prnewswire.com

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DigiFT Introduces First Actively Managed Tokenized Equity Fund with BNY as Investment Management Services Provider

Jan -26

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.66%)

6. Segments

Securities Services

Expected Growth: 4.5%

The Bank of New York Mellon Corporation's financial services for securities and investments management will experience growth driven by increasing demand for asset servicing and outsourcing, and the adoption of advanced technologies such as artificial intelligence and blockchain, which enhance operational efficiency and improve client experience.

Market and Wealth Services

Expected Growth: 7.5%

Increased adoption of digital wealth management platforms, growing demand for sustainable investment solutions, and expanding presence in emerging markets drive growth for BNY Mellon’s financial services for global investment managers and Wealth Management.

Investment and Wealth Management

Expected Growth: 5.3%

The Bank of New York Mellon Corporation's investment and wealth management services are driven by increasing demand for digital wealth management solutions, expansion into emerging markets, and acquisitions.

Other

Expected Growth: 8.4%

Driven by increasing demand for treasury services, foreign exchange, and trade finance, the Bank of New York Mellon’s strategic acquisitions and innovative digital solutions, the other segment is expected to grow steadily.

7. Detailed Products

Investment Servicing

Provides custody, accounting, and administrative services to support investment managers and their clients

Wealth Management

Offers investment management, wealth planning, and private banking services to high net worth individuals and families

Corporate Trust

Provides trust and agency services to corporations, governments, and financial institutions

Depositary Receipts

Issues and administers American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) for non-US companies

Treasury Services

Provides cash management, trade finance, and escrow services to corporations and financial institutions

Markets

Offers foreign exchange, securities lending, and collateral management services to institutional clients

Digital

Develops and provides digital solutions for investment servicing, wealth management, and treasury services

8. The Bank of New York Mellon Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Bank of New York Mellon Corporation is medium due to the presence of alternative financial institutions and digital payment systems.

Bargaining Power Of Customers

The bargaining power of customers for The Bank of New York Mellon Corporation is low due to the complexity of financial services and the lack of price sensitivity among customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for The Bank of New York Mellon Corporation is low due to the availability of multiple suppliers and the lack of concentration in the supply chain.

Threat Of New Entrants

The threat of new entrants for The Bank of New York Mellon Corporation is low due to the high barriers to entry in the financial services industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry for The Bank of New York Mellon Corporation is high due to the presence of multiple competitors in the financial services industry, leading to a highly competitive market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.33%
Debt Cost 4.38%
Equity Weight 38.67%
Equity Cost 9.46%
WACC 6.34%
Leverage 158.62%

11. Quality Control: The Bank of New York Mellon Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
BNY Mellon

A-Score: 6.7/10

Value: 4.6

Growth: 6.4

Quality: 5.7

Yield: 5.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
BlackRock

A-Score: 5.7/10

Value: 2.2

Growth: 5.3

Quality: 7.9

Yield: 4.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Ameriprise Financial

A-Score: 5.7/10

Value: 4.4

Growth: 8.0

Quality: 7.6

Yield: 2.0

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Ares Management

A-Score: 4.8/10

Value: 1.1

Growth: 5.7

Quality: 5.5

Yield: 6.0

Momentum: 4.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Blackstone

A-Score: 4.8/10

Value: 0.3

Growth: 4.1

Quality: 7.4

Yield: 7.0

Momentum: 3.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
KKR

A-Score: 4.5/10

Value: 2.9

Growth: 6.6

Quality: 6.3

Yield: 2.0

Momentum: 3.5

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

118.54$

Current Price

118.54$

Potential

-0.00%

Expected Cash-Flows