Facts You Need to Understand The Bank of New York Mellon Stock

The Bank of New York Mellon logged a -1.44% change Friday, and is now trading at a price of $47.31 per share. The S&P 500 index moved -1.44% and the Nasdaq posted a -1.4% change.

The Bank of New York Mellon shares moved -2.2% over the last 52 weeks, with a high of $52.26 and a low of $35.62. During this time, the stock outperformed the S&P 500 index by 5.26%. As of January 2022, the company's 50-day average price is $50.0. The Bank of New York Mellon Corporation, commonly known as BNY Mellon, is a multinational American investment banking services holding company headquartered in New York City. The large-cap Finance company is based in New York, NY. The Bank of New York Mellon has returned a 3.08% dividend yield over the last 12 months.

Declining EPS Growth Trend with a Highly Leveraged Balance Sheet:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $16,462 $15,808 $15,931 $16,377
Revenue Growth n/a -3.97% 0.78% 2.8%
Gross Margins 33.94% 28.26% 29.18% 20.32%
Gross Margins Growth n/a -16.74% 3.26% -30.36%
Operating Margins 12.78% 5.72% 6.41% -7.79%
Operating Margins Growth n/a -55.24% 12.06% -221.53%
Earnings Per Share $4.93 $4.08 $4.67 $3.18
EPS Growth n/a -17.24% 14.46% -31.91%
Diluted Shares (MM) 901 887 804 808
Free Cash Flow (MM) -$1,114 $3,816 $1,623 $13,722
FCF Growth n/a 442.55% -57.47% 745.47%
Capital Expenditures (MM) $1,210 $1,222 $1,215 $1,346
Net Debt / EBITDA 3.71 5.27 6.04 5.11

The Bank of New York Mellon Is Fairly Priced at Current Levels:

Compared to the Finance sector's average of 14.34, The Bank of New York Mellon has a trailing twelve month P/E ratio of 16.31 and, according to its EPS guidance of 5.43, an expected P/E ratio of 8.71. The Bank of New York Mellon's PEG ratio is 1.74 based on its 9.4% annual average growth rate of historical and projected earnings per share. This suggests that the company's shares are overvalued.

However, The Bank of New York Mellon is likely undervalued in terms of its equity because its P/B ratio is 1.041 compared to its sector average of 1.57. The company's shares are currently trading -27.48% below their Graham number, implying there is a margin of safety for the stock. The Graham number is calculated according to the formula:

√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 4.26 * 44.4) = $65.24

15 analysts are following The Bank of New York Mellon and have set target prices ranging from $49.0 to $64.0 per share. On average, they have given the company a rating of buy. At the current price of $47.31, BK is trading -16.22% away from its average analyst target price of $56.47 per share, implying an analyst consensus of some upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.