State Street Corporation Just Missed Earnings - But Analysts Have Updated Their Models

Last week saw the newest second-quarter earnings release from State Street Corporation (NYSE:STT), an important milestone in the company's journey to build a stronger business. It was a pretty mixed result, with revenues beating expectations to hit US$3.4b. Statutory earnings fell 6.1% short of analyst forecasts, reaching US$2.17 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for State Street from eleven analysts is for revenues of US$13.6b in 2025. If met, it would imply a reasonable 2.3% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$9.41, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$13.5b and earnings per share (EPS) of US$9.51 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

See our latest analysis for State Street

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$114. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic State Street analyst has a price target of US$131 per share, while the most pessimistic values it at US$90.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await State Street shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the State Street's past performance and to peers in the same industry. The analysts are definitely expecting State Street's growth to accelerate, with the forecast 4.6% annualised growth to the end of 2025 ranking favourably alongside historical growth of 1.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 5.7% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, State Street is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that State Street's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$114, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple State Street analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for State Street that you need to take into consideration.

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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.