Citi opens ‘positive catalyst watch’ on BNY Mellon after selloff

Citi analyst Keith Horowitz opened a “positive catalyst watch” on BNY Mellon (BK) into the bank’s Q2 report and keeps a Buy rating on the shares with a $58 price target. State Street (STT) made significant negative revisions to its 2023 net interest income guidance citing continued deposit cost pressures as well as larger than expected Downtown Development Authority migration, which the market viewed this as a readthrough for BNY Mellon, the analyst tells investors in a research note. However, Citi’s work on deposit mix leads it to believe the readthrough was overdone given BNY’s “differentiated” deposit mix is lower beta than State Street. Plus, the firm believes believe BNY’s DDA mix guidance was more conservative.