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Dec. 8, 2021, 10:35 a.m. EST

Jefferies reiterates buy rating on State Street after reduction of Black Rock ETF servicing business

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By Steve Gelsi

Jefferies analyst Ken Usdin reiterated a buy rating on State Street Corp. on Wednesday and said the retention of 15% of BlackRock Inc.'s /zigman2/quotes/207946232/composite BLK -0.94% ETF servicing business will benefit the company. State Street revealed in filings earlier this year that it would lose a chunk of its ETF servicing business from BlackRock. BlackRock has now finalized its new structure with Citigroup Inc. /zigman2/quotes/207741460/composite C -0.93% handling 40% of the $2.3 trillion ETF business, JPMorgan Chase & Co. /zigman2/quotes/205971034/composite JPM -1.76% handling 30%; also Bank of New York Mellon Corp. /zigman2/quotes/200171276/composite BK -0.93% and State Street with 15% each. "We see this as a win for everyone, with the loss well-telegraphed for STT but the retention of 15% a positive, as are the new wins for the others in a fast-growing asset class," Usdin said. Usdin said Jefferies has already subtracted $150 million in revenue from its models, but the actual figure could be about $160 million given asset value growth. Shares of State Street fell 0.9% in morning trading.

/zigman2/quotes/207946232/composite
US : U.S.: NYSE
$ 787.96
-7.51 -0.94%
Volume: 696,630
Jan. 27, 2022 4:00p
P/E Ratio
20.62
Dividend Yield
2.48%
Market Cap
$120.66 billion
Rev. per Employee
$1.23M
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/zigman2/quotes/207741460/composite
US : U.S.: NYSE
$ 64.15
-0.60 -0.93%
Volume: 24.68M
Jan. 27, 2022 4:04p
P/E Ratio
6.36
Dividend Yield
3.18%
Market Cap
$128.49 billion
Rev. per Employee
$381,305
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/zigman2/quotes/205971034/composite
US : U.S.: NYSE
$ 145.31
-2.61 -1.76%
Volume: 17.54M
Jan. 27, 2022 4:00p
P/E Ratio
9.47
Dividend Yield
2.75%
Market Cap
$437.14 billion
Rev. per Employee
$497,080
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/zigman2/quotes/200171276/composite
US : U.S.: NYSE
$ 58.37
-0.55 -0.93%
Volume: 4.96M
Jan. 27, 2022 4:02p
P/E Ratio
14.07
Dividend Yield
2.33%
Market Cap
$48.66 billion
Rev. per Employee
$332,763
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