US Banks: 2Q26 Preview: JPM, WFC, C, GS, MS, BK, STT, NTRS

Research evidence excerpt

US Banks: 2Q26 Preview: JPM, WFC, C, GS, MS, BK, STT, NTRS

BofA research: Goldman Sachs: The Curse of Elevated Expectations

Trust Banks: STT coming-in hot, BNY upside watched

While the operating backdrop (rates, asset prices, volatility) is largely positive for all

three banks, investor positioning seems long biased toward State Street (STT) ahead of

an upgrade to strategic targets. The combination of a potential catalyst event and a

stock that trades at a 2x P/E discount to closest peer BNY (2.8x P/YE6e TBV vs. 4.3x),

not surprisingly, driving investor interest. Consensus forecast calling for ROTCE

improvement to 24-25% by FY27-28 (23.2% FY26e), likely requires an upside boost for

the stock to close the relative valuation gap vs. BNY. As context, BNY upgraded its

medium term ROTCE target to ~28% back in January with consensus forecast for 28-

29% FY27-28. BofA research: State Street: Stage set for rollout of new strategic targets

We remain bullish on BNY given the potential for superior revenue growth (expect

upward revision to FY26 guide) and better than expected operating leverage on the back

of mgmt’s actions to extract franchise synergies, while positioning BNY to monetize on

opportunities created by the adoption of AI and digital asset technologies, while

mitigating the disruption risks. That said, we acknowledge that stock outperformance

from here will likely require positive EPS revisions, tangible evidence that mgmt. actions

to cross-sell and acquire new clients have reset the organic growth potential of the

franchise (ex. market driven tailwinds), and confidence in the resiliency of the ~28%

ROTCE outlook.

Similar to peers, in addition to the tailwinds tied to the operating backdrop, Northern

Trust’s (NTRS) EPS growth should continue to benefit from mgmt.