Truist and Morgan Stanley have revised their outlooks for State Street (STT) following its Q4 2025 earnings report. While the company demonstrated strong fee growth and exceeded EPS estimates, concerns regarding increased expenses and the absence of updated medium-term financial targets have led to a cautious re-evaluation by analysts. State Street's significant achievements in asset management and custody highlight its market position, yet future expense management remains a key focus for investors.
Truist and Morgan Stanley have provided updated analyses for State Street (STT), reflecting adjustments to their financial models. Truist has lowered its price target to $136 from $138, opting to maintain a 'Hold' rating on the stock. This decision stems from a review of State Street's fourth-quarter 2025 performance, which showcased healthy fee income growth but was counterbalanced by elevated expense forecasts. Concurrently, Morgan Stanley also reduced its price target for State Street, moving it from $168 to $164, while still keeping an 'Overweight' rating. This adjustment came despite State Street surpassing earnings per share (EPS) estimates by 6%. However, the market reacted negatively, pushing the stock down by 6%, primarily due to the company's failure to provide updated medium-term financial objectives and management's cautious statements regarding future expenditure.
Revised Analyst Targets for State Street
Truist has adjusted its price target for State Street (STT) to $136, down from $138, while reaffirming a 'Hold' rating. This modification follows an assessment of the firm's Q4 2025 results, where stronger-than-anticipated fee growth was offset by increased expense projections. Similarly, Morgan Stanley also lowered its price target for STT to $164 from $168, despite an impressive 6% beat on EPS. The market's negative reaction, which saw the stock fall by 6%, was largely attributed to the absence of updated medium-term targets and conservative management commentary on future costs. These revisions highlight a mixed sentiment among analysts, acknowledging State Street's operational strengths while factoring in potential headwinds from rising expenses and strategic communication.
Following a detailed evaluation of State Street's Q4 2025 financial disclosures, investment bank Truist recalibrated its valuation of the company, leading to a revised price target of $136, a slight reduction from its previous $138. The firm reiterated its 'Hold' recommendation, citing that while State Street exhibited robust growth in its fee-based revenues, this positive factor was largely mitigated by upward revisions in its future expense forecasts. In a parallel move, Morgan Stanley also revised its price target for State Street downward to $164 from $168. This adjustment occurred despite State Street announcing a 6% beat on its earnings per share expectations. The market's response to these developments was notably cautious, with State Street's stock experiencing a 6% decline. Analysts pointed to investor unease stemming from the company's decision not to issue updated medium-term financial guidance, alongside management's circumspect outlook regarding impending operational costs. These collective actions by leading financial institutions underscore a nuanced perspective on State Street's financial trajectory, balancing past performance against future uncertainties.
State Street's Robust Q4 2025 Performance and Future Outlook
In the fourth quarter of 2025, State Street Corporation (STT) reported a 14% year-over-year increase in EPS, contributing to a full-year revenue of approximately $14 billion. The company achieved a significant milestone, with assets under custody and administration exceeding $50 trillion for the first time, and assets under management growing by 20% to $5.7 trillion. State Street also demonstrated strong profitability, marked by a 20% return on tangible common equity and $500 million in annual productivity savings. Despite these impressive operational and financial achievements, the market's focus has shifted to the implications of increased expense forecasts and the lack of explicit medium-term financial targets, influencing analyst ratings and investor sentiment.
State Street Corporation showcased a strong operational and financial performance in the fourth quarter of 2025, with a notable 14% year-over-year surge in earnings per share. This robust quarterly showing contributed to the company's impressive full-year revenue, which totaled approximately $14 billion. A significant highlight of the period was State Street's achievement of managing over $50 trillion in assets under custody and administration, marking a first for the financial institution and underscoring its expansive scale and market leadership. Furthermore, assets under management witnessed a substantial 20% increase, reaching $5.7 trillion. The company also reported a solid profitability metric with a 20% return on tangible common equity and successfully realized $500 million in annual productivity savings, demonstrating efficient cost management. Despite these commendable achievements, the investment community and analysts have turned their attention towards the company's forward-looking prospects, particularly in light of elevated expense projections and the absence of concrete medium-term financial guidance. This forward-looking uncertainty appears to be tempering the otherwise positive assessment of State Street's recent financial success.