Yahoo Finance Is It Time To Consider Buying The Bank of New York Mellon Corporation (NYSE:BK)?
Let’s talk about the popular The Bank of New York Mellon Corporation (NYSE:BK). The company’s shares received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to $55.64 at one point, and dropping to the lows of $48.45. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Bank of New York Mellon’s current trading price of $49.15 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Bank of New York Mellon’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
See our latest analysis for Bank of New York Mellon
What is Bank of New York Mellon worth?
Bank of New York Mellon appears to be overvalued by 21.94% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$49.15 on the market compared to my intrinsic value of $40.31. This means that the opportunity to buy Bank of New York Mellon at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since Bank of New York Mellon’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Bank of New York Mellon?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Though in the case of Bank of New York Mellon, it is expected to deliver a relatively unexciting earnings growth of 2.4%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in BK’s future outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe BK should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on BK for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Bank of New York Mellon. You can find everything you need to know about Bank of New York Mellon in the latest infographic research report. If you are no longer interested in Bank of New York Mellon, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
