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1. Company Snapshot

1.a. Company Description

State Street Corporation, through its subsidiaries, provides a range of financial products and services to institutional investors worldwide.The company offers investment servicing products and services, including custody; product accounting; daily pricing and administration; master trust and master custody; depotbank services; record-keeping; cash management; foreign exchange, brokerage and other trading services; securities finance and enhanced custody products; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; performance, risk, and compliance analytics; and financial data management to support institutional investors.It also engages in the provision of portfolio management and risk analytics, as well as trading and post-trade settlement services with integrated compliance and managed data.


In addition, the company offers investment management strategies and products, such as core and enhanced indexing, multi-asset strategies, active quantitative and fundamental active capabilities, and alternative investment strategies.Further, it provides services and solutions, including environmental, social, and governance investing; defined benefit and defined contribution; and global fiduciary solutions, as well as exchange-traded fund under the SPDR ETF brand.The company provides its products and services to mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations, endowments, and investment managers.


State Street Corporation was founded in 1792 and is headquartered in Boston, Massachusetts.

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1.b. Last Insights on STT

State Street Corporation's recent performance is driven by its high-quality, fee-driven business model, with a 97% retention rate in its investment servicing segment. The company's shift towards passive products is expected to drive growth. Additionally, its robust fee income from trading and asset servicing, as well as higher Net Interest Income (NII), are anticipated to boost Q3 earnings. The company has also introduced new ETFs, including the Select Sector SPDR Premium Income ETF Suite and the State Street Short Duration IG Public & Private Credit ETF.

1.c. Company Highlights

2. State Street's Q3 2025 Earnings: A Strong Performance

State Street Corporation reported a robust third-quarter 2025 earnings per share (EPS) of $2.78, beating analyst estimates of $2.64, representing a 23% year-over-year increase. Total revenue rose 9% to approximately $3.5 billion, driven by a 12% growth in fee revenue. The company's pretax margin expanded to 31%, and return on tangible common equity (RoTE) was 21%. The strong financial performance was a testament to the company's effective execution and resilient strategy.

Publication Date: Oct -20

📋 Highlights
  • Strong EPS & Revenue Growth:: Q3 2025 EPS rose 23% to $2.78; total revenue climbed 9% to $3.5B, with fee revenue up 12%.
  • Record AUCA & AUM:: Investment services reached $51.7T in AUCA; investment management AUM hit $5.4T, driven by product innovation.
  • Margin & Payout Efficiency:: Pretax margin expanded to 31%; total payout ratio at 79%, with $1.5B returned to shareholders YTD.
  • Markets & Balance Sheet Strength:: FX Trading Services volumes grew double-digits; CET1 ratio at 11.3%, loan portfolio quality remains high with >20% in private credit.
  • Strategic Expansion & ROI:: $400M backlog expected to drive 2025-2026 growth; RoTE at 21%, with 75–100 bps premium on reinvestment of $5B cash flows.

Segment Performance

The investment services segment delivered strong year-over-year servicing fee growth, with a record $51.7 trillion in Assets Under Custody and Administration (AUCA). State Street also achieved a key milestone in its wealth services strategy with a strategic partnership and minority investment in Apex Fintech Solutions. In investment management, record quarterly management fee revenue was reported, with period-end Assets Under Management (AUM) climbing to a record $5.4 trillion.

Revenue Growth and Margin Expansion

The company's revenue growth was driven by strong performance in its investment services and investment management segments. State Street Markets saw strong year-over-year revenue growth in both Securities Finance and FX Trading Services. The company's balance sheet remains solid, with a standardized CET1 ratio of 11.3% and a total payout ratio of 79%. New CEO John Woods highlighted his priorities, including partnering with the management team to drive execution and profitability.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of 1.25, State Street's valuation appears reasonable. The company's Dividend Yield stands at 2.73%, providing a relatively attractive return for income-seeking investors. The company's strong financial performance and commitment to returning capital to shareholders support its dividend yield.

Outlook and Guidance

For the full year 2025, State Street expects total fee revenue growth of 8.5-9%, and net interest income (NII) to be down slightly. Expense growth is expected to be around 4.5%, and the company targets a total payout ratio of approximately 80%. The company's net interest income is expected to improve in the fourth quarter, driven by non-rate related tailwinds, including the recurring turnover of the investment portfolio and the runoff of terminated interest rate risk management hedges.

Management's Strategy and Priorities

CEO John Woods believes that State Street's story is underappreciated, citing strong fee growth, operating leverage, and innovation. He plans to remain focused on driving execution and profitability, with a commitment to returning capital to shareholders. The company's disciplined approach to M&A and capital deployment is expected to continue, with a focus on supporting clients' organic growth and funding strategic investments.

3. NewsRoom

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State Street Corporation $STT Shares Purchased by Arrowstreet Capital Limited Partnership

Dec -03

Source: defenseworld.net

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State Street Investment Management Becomes the Distributor for Select Sector SPDR® ETF Franchise

Dec -01

Source: businesswire.com

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American Century Companies Inc. Buys 27,425 Shares of State Street Corporation $STT

Nov -29

Source: defenseworld.net

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State Street Corporation $STT Shares Bought by Advisors Asset Management Inc.

Nov -28

Source: defenseworld.net

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Active vs. Passive ETF Flows, State Street on ETF Industy's Future | ETF IQ 11/24/2025

Nov -24

Source: youtube.com

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State Street to Speak at the Goldman Sachs 2025 Financial Services Conference

Nov -21

Source: businesswire.com

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State Street Investment Management Announces Share Splits for Five Select Sector SPDR® ETFs

Nov -20

Source: businesswire.com

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State Street Rolls Out Low-Cost Leveraged Loan ETF: A Rival To Its Own SRLN?

Nov -19

Source: benzinga.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.86%)

6. Segments

Investment Servicing

Expected Growth: 8.9%

State Street Corporation's 8.9% growth in Investment Servicing is driven by increasing demand for outsourced investment operations, growth in alternative assets, and expansion into new markets. Additionally, the company's investments in digital platforms and technology have improved operational efficiency, enabling it to onboard new clients and increase assets under management.

Investment Management

Expected Growth: 8.9%

State Street Corporation's 8.9% growth in Investment Management is driven by increasing demand for ETFs and index funds, expansion into alternative investments, and strategic acquisitions. Additionally, the company's strong brand reputation, diversified client base, and investments in digital transformation and operational efficiency have contributed to its growth momentum.

Other

Expected Growth: 7.03%

State Street Corporation's 7.03% growth in 'Other' segment is driven by increasing demand for its investment management services, growth in global exchange-traded funds (ETFs), and expansion of its outsourcing services to institutional investors. Additionally, the company's strategic acquisitions and partnerships have contributed to the segment's growth.

7. Detailed Products

Custody and Accounting

State Street's custody and accounting services provide clients with a comprehensive solution for managing their investment portfolios, including trade execution, settlement, and asset servicing.

Fund Administration

State Street's fund administration services provide investment managers with a range of services, including fund accounting, financial reporting, and compliance support.

Transfer Agency

State Street's transfer agency services provide investors with a range of services, including account maintenance, transaction processing, and customer support.

Alternative Investment Solutions

State Street's alternative investment solutions provide investors with a range of services, including fund administration, accounting, and reporting for alternative assets such as private equity and real estate.

Foreign Exchange

State Street's foreign exchange services provide clients with a range of solutions for managing foreign exchange risk, including spot and forward transactions, options, and hedging strategies.

Securities Lending

State Street's securities lending services provide investors with a range of solutions for generating revenue from their portfolios, including securities lending, borrowing, and collateral management.

Data and Analytics

State Street's data and analytics services provide clients with a range of solutions for managing and analyzing their investment data, including portfolio analytics, risk management, and performance measurement.

8. State Street Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

State Street Corporation's threat of substitutes is moderate due to the presence of alternative financial institutions and investment firms that offer similar services.

Bargaining Power Of Customers

State Street Corporation's customers have significant bargaining power due to their large size and ability to negotiate prices and services.

Bargaining Power Of Suppliers

State Street Corporation has a diverse supplier base, which reduces the bargaining power of individual suppliers.

Threat Of New Entrants

The threat of new entrants in the financial services industry is low due to the high barriers to entry, including regulatory requirements and capital requirements.

Intensity Of Rivalry

The intensity of rivalry in the financial services industry is high due to the presence of many established players and the need to differentiate services and prices.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 47.46%
Debt Cost 11.57%
Equity Weight 52.54%
Equity Cost 11.57%
WACC 11.57%
Leverage 90.34%

11. Quality Control: State Street 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
Federated Hermes

A-Score: 7.7/10

Value: 5.9

Growth: 6.6

Quality: 8.0

Yield: 7.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
State Street

A-Score: 6.5/10

Value: 6.6

Growth: 4.7

Quality: 5.6

Yield: 6.0

Momentum: 7.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
FS KKR Capital

A-Score: 6.4/10

Value: 6.0

Growth: 4.4

Quality: 7.2

Yield: 10.0

Momentum: 1.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
SEI Investments

A-Score: 6.3/10

Value: 4.1

Growth: 5.6

Quality: 9.2

Yield: 2.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
Prospect Capital

A-Score: 5.9/10

Value: 6.3

Growth: 3.9

Quality: 6.9

Yield: 10.0

Momentum: 0.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Cohen & Steers

A-Score: 5.3/10

Value: 3.8

Growth: 3.3

Quality: 8.8

Yield: 7.0

Momentum: 1.5

Volatility: 7.7

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

123.61$

Current Price

123.61$

Potential

-0.00%

Expected Cash-Flows