Bank of New York Mellon’s stock falls after BofA Securities analyst turns bearish
Share of Bank of New York Mellon Corp. fell 1.7% in morning trading Friday, to underperform the its financial-sector peers, after BofA Securities analyst Michael Carrier turned bearish on the bank holding company, as ongoing pressure from low interest rates and moderating deposits are expected to mute future returns. Carrier cut this rating to underperform from neutral, and lowered his stock price target to $39 from $42. He said the revenue backdrop appears “challenging” and will likely keep weighing on valuation. “We expect [net interest income] to remain under pressure given low short-term rates and our expectation of some moderating deposit balances, while we also expect fee waivers to be ongoing,” Carrier wrote in a note to clients. “In addition, given the low rate/yield backdrop, we expect some pressure on fixed income flows, as well as returns, particularly if medium/longer term rates continue to gradually rise.” The stock, which has lost 4.7% amid a four-day losing streak, has shed 24.8% year to date. Meanwhile, the SPDR Financial Select Sector ETF , which is down 0.9% Friday, has lost 11.7% this year and the S&P 500 has gained 10.6%.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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