State Street (STT): Assessing Valuation After New Apex Fintech Partnership and Analyst Upgrade

If you have been keeping an eye on State Street (STT), the latest move is definitely one to pay attention to. The company just announced a new partnership with Apex Fintech Solutions, which includes a minority investment and a plan to build a global digital wealth custody platform. This joint venture will combine State Street’s institutional infrastructure with Apex’s API-driven technology. The aim is to modernize wealth services for advisors and self-directed investors on a global scale.

Market sentiment seems to be shifting alongside these developments. Over the past year, State Street’s stock has climbed 39%, a jump that stands out against a backdrop of steady gains over the longer term. While momentum has picked up in the past three months, recent weeks have seen modest declines. This shows that investors are weighing both the new growth story and any near-term execution risks. The analyst community also appears to be warming to the company’s new trajectory following the Apex announcement.

After a year of strong progress and this digital expansion, the big question for investors is whether State Street is now undervalued or if future growth is already reflected in the current share price?

Most Popular Narrative: 1.9% Undervalued

State Street is seen as slightly undervalued according to the most widely followed narrative, which calculates a fair value just above the current trading price using a discount rate that reflects standard market expectations.

The acceleration of passive and ETF investing continues to benefit State Street's leading SPDR ETF franchise. This is demonstrated by significant inflows, expanding market share in low-cost products, and record trading volumes, which are expected to drive increased recurring management fees and higher operating margins over time.

Want to understand why analysts think this financial giant is still trading below fair value? The narrative hints at a set of optimistic forecasts for revenue, margins, and market growth that could reshape the company's profit picture. Which future figures are turning heads on Wall Street? Keep reading to unlock the core projections that could justify a higher share price.

Result: Fair Value of $115.11 (UNDERVALUED)

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

However, accelerating fintech innovation and increased fee pressure could challenge State Street's growth story if the company does not continue adapting quickly enough.

Find out about the key risks to this State Street narrative.

Another View: DCF Model Suggests More Upside

While the consensus price target hints at fair value, our DCF model looks deeper into State Street's future cash flows and indicates that it may be undervalued. Could this model be revealing potential that others are missing?

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 State Street 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 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 State Street Narrative

If you want a different perspective or like to dig into the data on your own terms, you can shape your own narrative in just a few minutes. Do it your way

A great starting point for your State Street research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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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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