BK Stock Gets Post-Earnings Boost

The stock is testing its footing atop recent pressure at the 40-day moving average today

Deputy Editor
Apr 16, 2020 at 10:05 AM
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Financial name Bank of New York Mellon Corp (NYSE:BK) is up 6.4% at $36.88 after posting first-quarter earnings of $1.05 per share, and revenue of $4.11 billion, both of which came in higher than analysts' estimates. The investment bank cited increased fee revenue and higher transaction volumes for the earnings beat, adding that its focus on investment services has allowed it to avoid the coronavirus-related pitfalls its larger and more diverse competitors are facing. 

BK is once again testing its footing atop its 40-day moving average -- a trendline the stock has closed north of just two times since its mid-January bear gap. And while the stock's rally off its late-March seven-year low ran out of steam just below the 50-day moving average, BK boasts a 16% monthly gain, though its year-to-date deficit still sits at roughly 30%. 

The brokerage bunch is cautious on BK, with nine calling it a "hold" or worse, compared to just three saying "buy" or better. The consensus 12-month price target of $42.27 is a 16.1% premium to current levels. 

Options players have taken a different stance. In the last 10 days, 2,049 calls have crossed the tape -- double the 1,601 puts exchanged in the same period. Echoing this, BK's Schaeffer's put/call open interest ratio (SOIR) of 0.67 sits in the 24th percentile of its annual range, suggesting short-term options players have rarely been more call-heavy in the past 12 months. 



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