Goldman Sachs Likes State Street (STT)

Goldman Sachs has a Buy rating and a $57 price target on shares of State Street STT. In a note to clients, Goldman writes, "STT remains our favorite idea in the space. While management's higher expense expectations overshadowed better than expected NIM guidance (155-165 bps), the firm continues to see a healthy momentum in its core businesses with nearly $400 bn of new servicing wins to be implemented over the next several quarters. Moreover, management's cost saving initiatives (net savings of $575mn-$625mn or nearly 25% of 4Q's pre-tax income run rate) will not begin materializing until 2012. Lastly, STT's Tier 1 common of 9.4% under Basel III (up from last quarter's 8.8%) remains solid, positioning the firm to re-instate the dividend in the coming quarters and potentially introduce a share repurchase program." Shares of STT lost $2.06 yesterday to close at $48.00.