Bank of New York Mellon (BK): Assessing Valuation After Recent Share Price Strength

Bank of New York Mellon (BK) has quietly put together the kind of performance long term investors appreciate, with the stock up roughly 5% over the past month and nearly 10% in the past 3 months.

See our latest analysis for Bank of New York Mellon.

That steady climb sits on top of a much stronger backdrop, with a year to date share price return north of 45% and multi year total shareholder returns comfortably outpacing the broader financials sector. This suggests momentum is still firmly on BK's side.

If this kind of steady compounding appeals to you, it could be worth seeing how it compares with fast growing stocks with high insider ownership.

Yet with the stock trading just below analyst targets and our intrinsic value estimate, investors now face a key question: Is Bank of New York Mellon still undervalued, or is the market already pricing in its future growth?

Most Popular Narrative: 3.5% Undervalued

With Bank of New York Mellon last closing at $114.02 against a narrative fair value of $118.10, the current pricing leaves a modest upside that hinges on specific growth and margin assumptions.

Analysts have maintained their fair value estimate for Bank of New York Mellon at $118.10. They cite stable revenue growth expectations and only minor adjustments to discount rate and profit margin assumptions.

Read the complete narrative.

Want to see what justifies paying more than today’s price? The narrative leans on steadier growth, fatter margins, and a richer future earnings multiple. Curious which assumptions really move that valuation needle?

Result: Fair Value of $118.10 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative could unravel if digital transformation stalls, or if fee pressure and market volatility weigh more heavily on long term revenue growth.

Find out about the key risks to this Bank of New York Mellon narrative.

Another View: Our DCF Flags Caution

While the narrative fair value points to 3.5% upside, our DCF model is more conservative and puts fair value nearer $99.74, below today’s $114.02. That tilt to overvalued territory raises a tougher question: has the market already banked most of BK’s digital upside?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Bank of New York Mellon for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 906 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Bank of New York Mellon Narrative

If you see the story differently or want your own numbers driven view, you can build a custom narrative in under three minutes: Do it your way.

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding Bank of New York Mellon.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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