State Street Stock Increased 9% In One Week, What’s Next?

State Street stock (NYSE: STT) has gained 9.4% in the last week, outperforming the S&P 500 (up 2.1%). Further, the same trend was observed over the last ten days (10% vs 1.7%).

The custody banking giant posted mixed results in the third quarter of 2022, with earnings beating the consensus but revenues missing the mark. It reported total revenues of $2.96 billion – down 1% y-o-y, driven by an 8% drop in the total fee income, almost offset by a 36% jump in the net interest income. While the fee income suffered due to lower investment servicing and management fees, net interest income (NII) benefited from improvement in the interest rate environment. Further, the same trend is expected to continue in the fourth quarter. 

The stock has gained 26% since the last earnings. Further, the company authorized an additional $500 million worth of share repurchase in Q4 2022 last week. It was the main reason behind the recent price movement.

Now, is State Street stock set to rise further, or could we expect some correction? We believe that there is a greater than 52% chance of a rise in State Street stock over the next month (21 trading days) based on our machine-learning analysis of trends in the stock price over the last ten years. See our analysis on State Street Stock Chance of Rise.

Twenty-One Day: STT 0.4%, vs. S&P500 0.9%; Underperformed market

(56% likelihood event; 52% probability of rise over next 21 days)

• State Street stock gained 0.4% over the last twenty-one trading days (one month), slightly more than the broader market (S&P500) increase of 0.9%
• A change of 0.4% or more over twenty-one trading days is a 56% likelihood event, which has occurred 1412 times out of 2517 in the last ten years
• Of these 1412 instances, the stock has seen a positive movement over the next twenty-one trading days on 739 occasions
• This points to a 52% probability for the stock rising over the next twenty-one trading days

Ten Day: STT 10%, vs. S&P500 1.7%; Outperformed market

(6% likelihood event; 59% probability of rise over next 10 days)

• State Street stock increased 10% over the last ten trading days (two weeks), compared to a broader market (S&P500) gain of 1.7%
• A change of 10% or more over ten trading days is a 6% likelihood event, which has occurred 142 times out of 2518 in the last ten years
• Of these 142 instances, the stock has seen a positive movement over the next ten trading days on 84 occasions
• This points to a 59% probability for the stock rising over the next ten trading days

Five Day: STT 9.4%, vs. S&P500 2.1%; Outperformed market

(2% likelihood event; 56% probability of rise over next five days)

• State Street stock gained 9.4% over a five-day trading period ending 12/13/2022, compared to the broader market (S&P500) increase of 2.1%
• A change of 9.4% or more over five trading days (one week) is a 2% likelihood event, which has occurred 61 times out of 2517 in the last ten years
• Of these 61 instances, the stock has seen a positive movement over the next five trading days on 34 occasions
• This points to a 56% probability for the stock rising over the next five trading days

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[1] Month-to-date and year-to-date as of 12/14/2022
[2] Cumulative total returns since the end of 2016

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