Wall Street Is Betting Big On The Bank of New York Mellon Corporation (BK). Are They Right?

On December 03, 2019, The Bank of New York Mellon Corporation (NYSE:BK) shares lost -2.06% or -1.01 points to close at $48.12 with a thin trading volume of 3.402 million shares. It opened the trading session at $48.61, the shares rose to $48.69 and dropped to $47.91, the range by which the price of stock traded the whole day. The company now has a market cap of $44.4 billion and currently has 922.01 million outstanding shares. The Bank of New York Mellon Corporation (BK) stock has accumulated 2.04 percent of market value in 21 trading days.

BK stock’s trailing 3-year beta is 1.12, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was $3.84 share in the trailing 52 weeks. The stock’s value surged 2.23 percent year to date (YTD) compared to a decline of -6.22 percent in 52 week’s period. The firm’s shares are still trading -11.33 percent below its 1-year high of $54.27 and 18.76 percent up from 52-week low of $40.52. The average consensus ranking on the company is 3, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a hold.

The Bank of New York Mellon Corporation (BK) is most likely going to rise 2.64 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $57-month high price target. This represents a whopping 18.45 percent increase from the current trading of shares. The 52-week median price target given by the analysts is $49.5, which means a return possibility of 2.87 percent in comparison with the closing price of the stock of $48.12 on December 03. The lowest price set for the stock is $44 — just above -8.56 percent from BK share price now.

Past records have indicated that shares in The Bank of New York Mellon Corporation declined on 22 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of BK’s Q4 earnings on January 16. Analysts are predicting revenue to suffer decline of -2.3 percent to $3.92B in the financial fourth quarter, while EPS will soar by about 0 percent to $0.99 per share. Earnings are seen to rise by 29.5 percent this year, 4.65 percent in the coming year and the trend continues by 4.65 percent every year in the next 5 years.

Let’s take a glimpse at some insider activity at The Bank of New York Mellon Corporation (NYSE:BK) and observe the pattern. The earliest insider trade happened on 10/17/2019. Harris Mitchell E. parted with a total of 50 thousand shares of the firm at average share price of $44.6. The total amount for the sale was set at $2.23 million. On completing this exchange, the Sr. Executive Vice President account balance was 142.27 thousand shares. The stock grew 10.16 percent from that insider sale. On 07/24/2019, GIBBONS THOMAS P, Vice Chairman, did a sale of 318.56 thousand shares at a price of $46.72 per share. This got rid of 14.88 million shares from the insider’s fortune and the stock experienced a 5.16 percent rally in price since the news became public. This exchange saw 378.15 thousand shares get out from the Vice Chairman account.

On 07/18/2019, Vice Chairman DALEY WILLIAM M recorded a purchase transaction valued at $509.96 thousand. The purchase at $44.93 a share has added 11.35 thousand shares into the insider’s portfolio position. Meanwhile, shares price witnessed 9.35 percent increase since the transaction reporting date. The company insider is left with 11.35 thousand shares remaining in the account. TRIAN FUND MANAGEMENT, L.P., who works as Director at the company, performed a sale of 621.81 thousand shares in a transaction worth $31.16 million. The disposal recorded on 05/03/2019 was priced at $50.11 per share. The stock price plunged -1.96 percent since the transaction. TRIAN FUND MANAGEMENT, L.P. currently holds a stake of 12.61 million in BK stock which is worth $606.62 million after the insider selling.

The stock is lingering around the initial support level of $47.79. After this, the following support is at the zone of $47.46. Up until the time the BK stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 52.97 on the daily chart, and this may be a cause for concern. In case the price goes below $47.46 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $48.57 level may cause a pull-back move approaching $49.02 mark.

The Bank of New York Mellon Corporation (BK) shares are trading at a P/E ratio of 12.5 times earnings posted in the trailing 12 months. The industry BK deals with has an average P/E of 17.3. Its P/B ratio is standing at 1.2X compared to the 1.6 industry average. It is additionally sporting a 3 on the Price-to-Sales ratio, compared to the industry’s P/S average of 2.8.