J.P. Morgan Lowers STT Target To $52 From $54

J.P. Morgan said today that it maintains its Neutral rating on State Street Corporation STT “on relative basis versus its peers due to its relatively greater risk from decline in market valuations, lower earnings quality, and challenging revenue environment.” “We are lowering our December 2011 price target to $52.00 from $54.00 due to lower projected 2011 EPS,” J.P. Morgan writes. “Our price target is based on 2011 EPS, target P/E multiple of 14.0 times, which is below the 5 year average P/E multiple of 15.0 times, plus net present value of future discount accretion (about $1 per share). “We expect STT is likely to trade at a discount to its 5 year average P/E multiple near term to reflect earnings pressure, greater earnings volatility, and numerous charges in several parts of the company over the past few years.” State Street closed Wednesday at $47.78.