Easing Regulations To Help State Street's Stock?

Performance Overview - State Street's stock (STT) has risen by about 29% year-to-date, outperforming peers like BNY which is up 57% [1] - The company surpassed street estimates in Q3 2024 with earnings of $2 26 per share and revenue growth of 22% YoY to$ 3 26 billion [1] - Fee revenues increased by 16% YoY to $2 62 billion, while average assets under management grew by 29% YoY to$ 4 73 trillion [1] - Assets under custody surged by 17% to $46 7 trillion, and net interest income rose by 16% driven by higher investment securities yields and loan growth [1] Margins and Cost Efficiency - Pre-tax margins improved to 28 4%, up almost 940 basis points compared to last year [2] - The company benefits from operating leverage due to its high fixed-cost structure, with revenues growing faster than total costs [2] - State Street has been streamlining operations to cut costs while focusing on higher-margin businesses [2] Historical Stock Performance - STT stock returns were 31% in 2021, 14% in 2022, and 4% in 2023, showing volatility similar to the S&P 500 [3] Market and Macroeconomic Factors - The Trefis High Quality Portfolio, consisting of 30 stocks, has outperformed the S&P 500 with less volatility [4] - Post-U S election, markets have been bullish with expectations of deregulation under the Trump administration, potentially lowering compliance costs for banks like STT [4] - Higher potential economic growth and tax cuts under Trump could benefit asset prices and custody banks [4] - The end of quantitative tightening by the U S Fed may improve liquidity, benefiting institutions and custody banks like State Street [4] Valuation - STT stock is valued at about$ 90 per share, slightly below the current market price [4]