Is State Street Corp (STT) overvalued?
On Equity Rank's model estimate, STT trades 11% below its fair value. State Street Corp (STT) last closed at $165.56; the multi-method model fair value is $186.13.
| Price | Model fair value | Price vs model |
|---|---|---|
| $165.56 | $186.13 | 11% below |
What the answer rests on
- 6 of 12 valuation methods put STT's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, STT's free cash flow would need to grow about 1.0% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -27.4% a year.
- STT trades at 14.2 times its last year's earnings, against a median of 13.3 for 97 profitable Asset Management companies.
- Over the past year the price sat below the model fair value on 95% of trading days. The gap ranged from 17% below to 5% 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 STT's fair value · What prices assume · Other companies