The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how custody bank stocks fared in Q2, starting with T. Rowe Price (NASDAQ: TROW).
Custody banks safeguard financial assets and provide services like settlement, accounting, and regulatory compliance for institutional investors. Growth opportunities stem from increasing global assets under custody, demand for data analytics, and blockchain technology adoption for settlement efficiency. Challenges include fee pressure from large clients, substantial technology investment requirements, and competition from both traditional players and fintech firms entering the space.
The 15 custody bank stocks we track reported a satisfactory Q2. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady as they are up 1.7% on average since the latest earnings results.
T. Rowe Price (NASDAQ: TROW)
Founded in 1937 by Thomas Rowe Price Jr., who pioneered the growth stock investing approach, T. Rowe Price (NASDAQ: TROW) is an investment management firm that offers mutual funds, advisory services, and retirement planning solutions to individuals and institutions.
T. Rowe Price reported revenues of $1.76 billion, up 1.6% year on year. This print exceeded analysts’ expectations by 0.5%. Overall, it was a satisfactory quarter for the company with an impressive beat of analysts’ EBITDA estimates but a slight miss of analysts’ advisory and servicing fees estimates.
Interestingly, the stock is up 3% since reporting and currently trades at $104.58.
Is now the time to buy T. Rowe Price? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: Voya Financial (NYSE: VOYA)
Originally spun off from Dutch financial giant ING in 2013 and rebranded with a name suggesting "voyage," Voya Financial (NYSE: VOYA) provides workplace benefits and savings solutions to U.S. employers, helping their employees achieve better financial outcomes through retirement plans and insurance products.
Voya Financial reported revenues of $1.9 billion, up 2.2% year on year, outperforming analysts’ expectations by 13.5%. The business had a stunning quarter with an impressive beat of analysts’ revenue estimates and a solid beat of analysts’ AUM estimates.
Voya Financial delivered the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 8.6% since reporting. It currently trades at $73.67.
Is now the time to buy Voya Financial? Access our full analysis of the earnings results here, it’s free for active Edge members.
Slowest Q2: Franklin Resources (NYSE: BEN)
Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE: BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.
Franklin Resources reported revenues of $1.59 billion, down 3.7% year on year, falling short of analysts’ expectations by 18.8%. It was a softer quarter as it posted a significant miss of analysts’ revenue and EPS estimates.
Franklin Resources delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 4.9% since the results and currently trades at $22.80.
Read our full analysis of Franklin Resources’s results here.
WisdomTree (NYSE: WT)
Originally founded as a financial media company before pivoting to ETF management in 2006, WisdomTree (NYSE: WT) is a financial services company that creates and manages exchange-traded funds (ETFs) and other investment products for individual and institutional investors.
WisdomTree reported revenues of $112.6 million, up 5.2% year on year. This number missed analysts’ expectations by 0.5%. Zooming out, it was a mixed quarter as it also recorded an impressive beat of analysts’ yield estimates but a miss of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $13.25.
Read our full, actionable report on WisdomTree here, it’s free for active Edge members.
Northern Trust (NASDAQ: NTRS)
Founded in 1889 during Chicago's post-Great Fire rebuilding boom, Northern Trust (NASDAQ: NTRS) provides wealth management, asset servicing, and banking solutions to corporations, institutions, families, and high-net-worth individuals globally.
Northern Trust reported revenues of $2.00 billion, down 26.4% year on year. This print topped analysts’ expectations by 1.9%. Overall, it was a strong quarter as it also produced an impressive beat of analysts’ AUM estimates and a decent beat of analysts’ revenue estimates.
Northern Trust had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $125.80.
Read our full, actionable report on Northern Trust here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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