BNY Mellon (BK): Assessing Valuation as New Stablecoin Fund Deepens Digital Asset Strategy

Bank of New York Mellon (BK) has just launched the BNY Dreyfus StablecoinReserves Fund, aiming to capture new opportunities created by updated U.S. regulations for stablecoins. This move signals a deepening commitment to digital asset infrastructure.

See our latest analysis for Bank of New York Mellon.

BNY Mellon's momentum is hard to ignore, with the share price up nearly 40% year-to-date and a 162.99% three-year total shareholder return reflecting investors’ confidence in its ambitions, particularly in digital asset infrastructure. Recent product launches and visible industry leadership have contributed to the positive sentiment, even as the broader market considers new risks and opportunities in crypto-related finance.

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So with BNY Mellon's shares climbing on digital innovation and regulatory tailwinds, is there still meaningful upside for investors, or have expectations around future growth already been fully priced in?

Most Popular Narrative: 8.5% Undervalued

With the narrative fair value at $118.10, about 8.5% above the latest close, analysts see further headroom despite strong recent gains. But what’s fueling this optimism?

Accelerated investment in digital platforms (including digital asset custody, AI integration, and the NEXEN ecosystem), coupled with strong early adoption, positions BNY Mellon for improved operating leverage and net margin expansion over the coming years, as scalable technology reduces costs and increases cross-selling opportunities.

Read the complete narrative.

Want to know what’s really powering that higher fair value? It all comes down to ambitious profit margin expansion and transformative revenue growth assumptions, plus a future earnings multiple that old-school banks rarely achieve. Curious about exactly what’s behind those numbers? Click through and see the full narrative calculation for all the details.

Result: Fair Value of $118.10 (UNDERVALUED)

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

However, ongoing client outflows and the uncertain pace of efficiency gains could pose real challenges, and these factors may potentially limit BNY Mellon's growth if trends persist.

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

Another View: DCF Perspective

For a different angle on value, our SWS DCF model estimates Bank of New York Mellon's fair value at $100.73 per share. This figure is below both its current price and the narrative's $118.10 target. This suggests a margin for error or perhaps a signal for caution. Which model should investors trust to guide their next move?

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 921 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 these conclusions don't fully match your view, take a closer look at the data yourself. Crafting your own take can be done in just 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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