State Street price target lowered to $98 from $102 at BofA

BofA lowered the firm’s price target on State Street (STT) to $98 from $102 and keeps an Underperform rating on the shares. The firm lowered price targets among its banks coverage by 6% on average, driven by worsening growth and a rising cost of capital. While the firm notes the heightened risk of a recession, or “recession scare,” amplified by a continued selloff in equity markets creating a “negative wealth effect,” it adds that the bank group is not discounting an outright recession, which is not the firm’s base case. If the so-called “adjustment” period for the U.S. economy leads to stronger growth, then the firm would be “biased towards adding exposure to best-in-class banking franchises,” BofA added.