State Street Corporation (STT): A Bull Case Theory

We came across a bullish thesis on State Street Corporation on Investing With Purpose’s Substack. In this article, we will summarize the bulls’ thesis on STT. State Street Corporation's share was trading at $113.22 as of September 18th. STT’s trailing and forward P/E were 12.55 and 10.53 respectively according to Yahoo Finance.

State Street Corporation (STT) has established itself as a cornerstone of global asset servicing, safeguarding trillions in client assets while generating steady, high-margin fees. The company’s fundamentals remain robust, with operating margins near 30%, free-cash-flow conversion exceeding 90%, and a conservative balance sheet supported by ample liquidity. Revenue growth has been consistent at 8–10% annually over the past three years, driven by rising assets under management, while net margins of ~20% reflect operational leverage and low credit-loss costs.

The company maintains a conservative debt/equity ratio of ~0.5×, interest coverage above 10×, and a free cash flow yield around 6%, supporting a dividend yield of ~2.8%. Valuation metrics are modest relative to peers, with a forward P/E of ~12× and P/FCF of ~8×, suggesting limited downside and potential for total return through both income and capital appreciation. Technically, STT has experienced a strong uptrend since April, with recent consolidation around the critical $109.50 support zone signaling a pause in momentum. Key Fibonacci and Bollinger Band levels indicate that holding this pivot could lead to targets between $111 and $114, while a break below $108.50 risks deeper pullbacks toward $106.40. The stock remains above major SMAs, with Ichimoku indicators confirming the uptrend.

A disciplined trade plan involves accumulating in the $109.50–$109.00 range, scaling into dips, and adding on a confirmed breakout above $110.50, with strict stops to manage risk. Overall, State Street offers a compelling medium-term investment opportunity, combining resilient fundamentals, strong cash flow, modest valuation, and an intact technical uptrend. The $109.50 pivot provides a clear entry point, while rising secular trends in passive investing and favorable rate environments support further upside, making it an attractive play for income-focused and growth-oriented investors alike.

Previously we covered a bullish thesis on BlackRock, Inc. (BLK) by Kroker Equity Research in February 2025, which highlighted the company’s dominance in global investment management, strong fee-based revenue, record net inflows, and robust margins driving shareholder returns. The company's stock price has appreciated approximately by 14.62% since our coverage. The thesis still stands as BlackRock’s scale and diversified revenue support growth. Investing With Purpose shares a similar perspective on State Street Corporation (STT) but emphasizes technical entry points and support zones.

State Street Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held STT at the end of the second quarter which was 51 in the previous quarter. While we acknowledge the potential of STT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.