Rising Rates, Software Business, and Expense Discipline Help State Street Weather Market Downturn

State Street ended 2022 with a healthy fourth quarter. Revenue of $3.16 billion and adjusted EPS of $2.07 beat the FactSet consensus estimates of $3.04 billion and $1.98, respectively. The firm’s sales wins, software business, expense control, and balance sheet are encouraging; however, lower market levels and the lack of meaningful net flows in the asset management business are weighing on the firm. Overall, we will maintain our wide moat rating and $90 fair value estimate on State Street’s shares.