Is The Bank of New York Mellon Corporation (BNY) overvalued?
On Equity Rank's model estimate, BNY trades 58% above its fair value. The Bank of New York Mellon Corporation (BNY) last closed at $147.72; the multi-method model fair value is $93.42.
| Price | Model fair value | Price vs model |
|---|---|---|
| $147.72 | $93.42 | 58% above |
What the answer rests on
- 2 of 13 valuation methods put BNY's value above its price and 11 put it below, so the methods mostly agree.
- To justify today's price, BNY's free cash flow would need to grow about 6.1% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -27.7% a year.
- BNY trades at 16.9 times its last year's earnings, against a median of 12.2 for 253 profitable Banks companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 15% above to 69% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind BNY's fair value · What prices assume · Other companies