BNY Mellon's (BK) two most important business division – asset servicing and asset & wealth management – accounts for roughly 27% and 26% of the company's stock value respectively. BNY Mellon primarily competes with State Street (STT), JPMorgan Chase (JPM) and Citigroup (C) in providing investment servicing (asset servicing, issuer services, clearing services) and investment management services to institutional investors around the world.
We have a $35.76 Trefis price estimate for BNY Mellon stock, significantly above the market price. Below we look at the potential upside and downside scenarios for BNY Mellon's stock.
4% Upside Scenario: $37.25 Trefis Price Estimate for BNY Mellon
BNY Mellon's Assets under Custody
We currently forecast BNY Mellon's AuC will increase from $25 trillion in 2010 to over $43 trillion in the coming years. However, a higher growth in BNY Mellon's to over $50 trillion driven by a faster than expected growth in emerging markets would mean an upside of 3-4% to the Trefis price estimate.
8% Downside Scenario: $33.12 Trefis Price Estimate for BNY Mellon
BNY Mellon's Assets under Management
We currently forecast BNY Mellon's AuM will increase from $1.2 trillion in 2010 to over $2.25 trillion by the end of our forecast driven by rising inflow of funds from emerging markets.
However, a much slower growth to only $1.5 trillion would result in a downside of 7-8% to the Trefis price estimate for BNY Mellon. Such a scenario can come into play as more and more people invest through online brokerage network, which increasingly offer sophisticated value-added services such as advisory, reporting and portfolio tracking thereby reducing funds inflows to asset managers
Disclosure: No position