Jefferies & Company's Take on Trust Banks (BK, NTRS, STT)

Jefferies & Company is out with a research report this morning, where it looks at the Trust Bank sector. The analysts' key point was that they are comfortable with 4Q estimates, with higher equity market levels and improving FX volume/volatility proxies likely to offset lower securities lending spreads. They believe that, should equity market levels hold through year-end, there could be a penny or so of EPS upside for each, all else equal. However, gong out a year or two, to 2012 and 2013, consensus estimates still seems high. Northern Trust NTRS is Hold rated. Bank of New York Mellon BK is Hold rated. State Street STT is Buy rated. All three have similarly strong comps in the upper single-digit range (8%-9%).