What Happened?
Shares of financial services giant State Street (NYSE: STT) fell 9.8% in the pre-market session after the company reported third-quarter 2026 financial results that missed Wall Street's revenue expectations.
According to a company press release, State Street reported revenue of $4.00 billion, an increase of 12.9% year on year, and adjusted earnings per share of $3.69. However, revenue fell short of Wall Street expectations of $4.04 billion, even as adjusted earnings were in line with consensus estimates of $3.68 per share. Top-line results were pressured as other fee revenue fell 29% to $98 million on market adjustments, while foreign exchange trading dropped 14% sequentially to $427 million. The release revealed that assets under management grew 15.8% year on year to $6.31 trillion, alongside $59.2 trillion in assets under custody and administration, while pre-tax profit reached $1.39 billion. Although assets under management topped analyst projections of $6.25 trillion, the revenue miss weighed on investor sentiment, prompting a sharp pre-market decline.
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What Is The Market Telling Us
State Street’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 3.1% on the news that an analyst at Keefe, Bruyette & Woods maintained an "Outperform" rating on the stock and raised the price target.
The firm increased its price forecast from $132.00 to $135.00. This vote of confidence followed the company's strong third-quarter 2025 financial results, which were released a few days prior. In that report, State Street disclosed earnings per share of $2.78 and revenue of $3.55 billion, surpassing analyst estimates. The solid quarterly performance likely bolstered the analyst's positive outlook on the company's shares.
State Street is up 25.1% since the beginning of the year, but at $161.51 per share, it is still trading 16.9% below its 52-week high of $194.26 from September 2026. Investors who bought $1,000 worth of State Street’s shares 5 years ago would now be looking at an investment worth $1,761.
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