Bank of New York Mellon Stock Soars 42% in 2025 but Is the Momentum Justified?

Thinking about what to do with Bank of New York Mellon stock right now? You’re not alone. With the share price chart looking like a mountain range, plenty of investors are trying to read the latest signals. The stock has cooled off just a touch over the past month, dipping -1.8%, but zoom out and you’ll notice some impressive momentum. Year-to-date returns are up a stunning 37.8%, and the stock has climbed 41.8% over the past year. The real eye-opener is that in five years, Bank of New York Mellon’s shares have soared 257.3%. That’s a performance any blue-chip investor has to respect.

So what’s driving these numbers? While the headlines lately haven't announced splashy new deals, analysts have pointed to the bank's strong capital position and its ongoing investments in digital banking infrastructure. Both of these factors seem to reassure institutional investors about long-term prospects. These developments help to explain why risk perception has shifted in a good way. It’s not just about excitement or short-term buzz; it’s about confidence in the fundamentals.

But does the price reflect fair value, or are things getting a bit heated? I've run the numbers across six different valuation checks, and here’s what stands out: Bank of New York Mellon is showing as undervalued on 3 out of 6, giving it a valuation score of 3. That sets the stage for a deeper dive. Next, I’ll walk through these valuation methods, and stick around, because I’ll reveal a more nuanced way to judge whether shares are truly a buy, sell, or hold.

Bank of New York Mellon delivered 41.8% returns over the last year. See how this stacks up to the rest of the Capital Markets industry.

Approach 1: Bank of New York Mellon Excess Returns Analysis

The Excess Returns valuation model examines how well a company generates profits above the true economic cost of its equity capital. For Bank of New York Mellon, this method assesses how much additional value the company creates on its investment base, using observed book value and projected return on equity from analysts.

The numbers indicate the following: The bank has a Book Value of $55.99 per share and a Stable EPS of $8.43 per share, based on weighted analyst estimates of future return on equity. Its cost of equity is estimated at $6.60 per share, meaning the bank delivers an Excess Return of $1.83 per share on its invested capital. The current average Return on Equity is 13.69%. Analysts forecast the Stable Book Value to rise to $61.58 per share, indicating confidence in the long-term growth of the business and its capital base.

With these inputs, the Excess Returns model estimates an intrinsic value that is 24.6% below the current market price, suggesting that Bank of New York Mellon shares are trading above their fundamental worth.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Bank of New York Mellon.

Our Excess Returns analysis suggests Bank of New York Mellon may be overvalued by 24.6%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Bank of New York Mellon Price vs Earnings

For profitable companies like Bank of New York Mellon, the price-to-earnings (PE) ratio is often the go-to metric for valuing the stock. It helps investors quickly gauge how much they are paying for each dollar of earnings, and it is especially useful when earnings are stable and growing. However, while a low PE might signal a bargain, growth expectations and perceived risk must always be taken into account. Companies with strong future earnings growth or lower risk profiles tend to command higher PE ratios naturally.

Let’s look at where Bank of New York Mellon stands. The company currently trades at 14.9x earnings. By comparison, the average PE ratio in the Capital Markets industry is 25.9x and the average for selected peers is even higher at 33.2x. At a glance, this suggests BK might be on the cheaper side. Context is key, and that is where the Simply Wall St Fair Ratio comes into play.

The Fair Ratio, which sits at 18.0x for BK, is calculated using a proprietary model that weighs not just industry averages, but also the company’s specific earnings outlook, profit margins, risk profile, and market cap. This more tailored approach gives us a sharper sense of what a fair PE multiple should really be, rather than simply following the herd or the broad market’s mood. Comparing the company’s actual PE of 14.9x to its Fair Ratio of 18.0x shows that the stock is currently trading at a discount to what would be considered a fair valuation for its specific circumstances.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Bank of New York Mellon Narrative

Earlier, we mentioned there's a more insightful way to understand valuation. Let’s introduce Narratives, an approach that puts you in the driver’s seat by letting you tell your own story about a company’s future, backing it up with your personal estimates for growth, margins, and fair value.

A Narrative takes the company’s story, connects it directly to a detailed financial forecast, and then translates that forecast into a fair value. This makes the investment process both practical and personal. With Simply Wall St’s Community page, used by millions of investors, Narratives are accessible tools designed for all experience levels, whether you’re a first-timer or a seasoned pro.

What sets Narratives apart is that they help you decide when to act by showing how your fair value compares to the current market price. They update dynamically as new information such as news or earnings reports comes out, so your thesis always stays relevant.

For example, imagine one investor expects Bank of New York Mellon’s digital leadership and ESG offerings to propel earnings and assigns a fair value of $113, while another, more cautious, sees risks from competition and sets a fair value closer to $85. Narratives allow both perspectives to be modeled and compared, transforming uncertainty into smarter, story-driven decisions.

Do you think there's more to the story for Bank of New York Mellon? Create your own Narrative to let the Community know!

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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